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The Bloor Perspective: Oracle's next gamble, India gets the Simputer, and X-Box issues
In this week's look at three key developments, Robin Bloor and his team assess Oracle's next drive forward, a budget computer for the Third World, and Microsoft's big gaming push...

By Bloor Research

Published: Monday 23 April 2001

It is expected that Larry Ellison is going to come up with a new set of fixed prices and implementation timescales for Oracle's applications. The announcement is expected this week and is seen as an aggressive reaction to his company's sliding third quarter figures.

Despite continued growth in Oracle's application revenues, sales have only increased around half as much as the company predicted. In common with just about every other solutions provider, the cause is said to be a high number of lost sales due to increasing uncertainty in the marketplace. Oracle is trying to remove some of the uncertainty by setting fixed price contracts with guaranteed delivery and implementation times.

With the aid of the META Group, Oracle is already using the integrated nature of its applications environment as a sales message for cost-conscious prospects. META has produced a report indicating up to 60 per cent of implementation costs for CRM projects come from the integration of the solution into its surroundings. Oracle's message is that by using an Oracle database, it is possible to integrate all applications over a common technology. It also has the ability to refer to its own use of technology in reducing costs.

This is a move that is bound to cost the company money and is not guaranteed to win over concerned business managers. Oracle may just find itself with increased commitments to existing customers who have reduced income. However, this is an aggressive strategy that one would expect from Oracle and the financial risk is one that it can well afford to take. Historically, Oracle has profited from such moves and the loss of a few million in reduced margins is small price to pay if it keeps the cash registers turning over.

Despite the risks, customers will turn to established names during periods of recession. Few will take risks with unknown names or financially weak suppliers. Already, Oracle is offering low cost migration for Sybase customers as an indication of its ability to compete. We can expect more of the same soon

Simply the Simputer

In an attempt to overcome the problems faced within the Third World, an Indian organisation has come up with a low-cost, low-spec computer and is trying to improve the availability of computer equipment in deprived areas.

The device, known as the Simputer (simple, inexpensive and multi-lingual), is due for release this week and is expected to sell for around $200.

The Simputer Trust is a non-profit organisation that has been looking into ways of making technology more available to the one billion or so potential users in India. For many, $200 is still going to be way out of their price range but it has to be a whole lot better than the costs of any of the major brands. Much of the reduced cost is attributed to the use of Linux and open source products. There is also an API provided that will allow users to develop their Simputer systems further.

While the sentiments behind the Simputer are most laudable, it seems a little odd that this organisation feels the need to come up with a completely different piece of hardware with its own mark-up language. Surely, if India - with its massive potential for selling hardware (there are already more than five million PCs in India) - can illustrate a demand for this top of the range Palm or low-end PC then one of the major manufacturers could make it cheaper and more efficiently. The real effort and achievement will be the delivery of an open source solution on these devices.

However, given that it is not expected to be available for purchase until March 2002, it is unlikely it will be the first to market with this idea.

X-Box has Achilles' heel

After the hype came the leaked blueprints and pictures. After that came the X-Box itself. Unveiled at the recent CES show by Microsoft supremo Bill Gates, it looked like the picture and the demos showed just what it could do.

But although the US public may have been wowed by Bill's exploits, the real test of a gaming machine lies across the Pacific and earlier this month Bill and his box arrived at the Tokyo Games Show ready to show the Japanese just what all the fuss is about.

Microsoft knows that it is not just about marketering or showmanship. It's about delivery and the delivery of a video console means more than just a plastic box full of chips. It's about software and associated technologies that exploit the hardware's potential to its fullest.

To this end, Microsoft has already established partnerships with some big name companies in Japan. Sega, now focusing on the software market after the failure of its Dreamcast machine, has already promised Microsoft 11 X-Box games. One of the key features of the X-Box is its internet connectivity and to support this the AT&T of Japan, Nippon Telephone and Telegraph, has agreed to bundle the X-Box with its broadband offering.

A key part of the X-Box sell is its online gaming capability, but this could be the X-Box's Achilles' heel. In many parts of the world broadband is still to be rolled out and through a combination of the economic slowdown and a competitive marketplace some broadband service providers have fallen by the wayside. It would be a backward step, and a challenge for the ever-spinning Microsoft marketing machine if a standard modem 'upgrade' has to be supplied as an intermediate measure.

Many have tried and failed to dominate the gaming marketplace. Nintendo, Sega and Sony have all been dominant in the past but only for a few years. As technology moves forward, so the manufacturers leapfrog one another and a new system comes into vogue. While Microsoft won over the Japanese audience and will have the software titles that often prove elusive to console manufacturers, its ability to dominate the market is going to lie ultimately in the hands of the broadband service providers.