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Oracle, IBM ready Network Computers

Oracle's Ellison sees Sun as fiercest rival in 100 million-unit market

By Sari Kalin

September  1996
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New York -- Oracle Corp. CEO and Chairman Larry Ellison told a group of customers here that the first network computer conforming to the company's specifications will be launched in October, and priced at $299.

Ellison would not reveal the name of the NC's manufacturer, except to say that it is a Japanese company. Ellison predicted that there will be 100 million NCs in use by the year 2000.

"The first six months will be rocky," Ellison said. "Once we have a mature product, which will be six months to a year from now, I think this will be explosive." Initial challenges will include perfecting the user interface and working with Internet service providers. NCs won't replace the PC, Ellison said, but will be popular in corporate settings and in the home as a communications device.

"Virtually every major telco in the world is in conversations with us about ... buying the NC and giving it away like cellular telephones," Ellison said. A major European telco is considering giving an NC to every home, said Ellison. He would not name which telephone company, but said it is neither France Telecom nor Deutsche Telekom.

As Europe becomes the European Union, this country is concerned about preserving its cultural identity, Ellison said, and the telco that might give away an NC might do so as a way "to knit the country together," much as France aimed to do with its Minitel system.

During the customer presentation, nearly a year to the day after Ellison first floated the NC concept at an industry forum in Europe, an executive demonstrated a keyboardless, diskless NC with 8 megabytes of RAM. The configuration used a Zenith television as a monitor, a mouse, and ran Oracle's InterOffice groupware application.

Some Oracle customers said they were interested in Oracle's presentations of the company's broader strategies in the areas of applications, databases, and plans to link those to the Internet and intranets. While some said they couldn't see using the NC in the short term, in the long term it piqued their interest.

"Not right now, but somewhere down the road," said Philip Theiss, vice president of global financial process development at Estee Lauder Companies in Melville, New York. He said that he could see a future application for the NC in field sales.

Richard DiBello, president of The Automation Group in Brooklyn, New York, said he was interested in using the NC as a bonus feature in a luxury "cyber" apartment building that is under development in Manhattan. The developers plan to use a T1 line to offer building tenants Internet access and video on demand.

"It has potential," DiBello said. "It certainly is going to deliver the applications that we're looking at."


Sun as a competitor
Ellison sees the company's toughest competition in the network computer market will come from Sun Microsystems, not from a breakaway group of former Oracle employees. Following a customer briefing here in early September, Ellison dismissed a planned family of single-application information appliances from Diba Inc., a startup formed by former Oracle employees.

"Ridiculous," Ellison said. "The great thing about computers is you can program them. You don't have the interface in the appliance; you have it in the software."

Sun's Java stations will give Oracle the most competition, Ellison said. (Sun is expected to release its "Internet toaster" in October.) Appliances will eventually come out based on Intel Corp. processors, but at a higher price point -- roughly $700 -- than planned for appliances based on ARM Ltd.'s chip, he said.

Microsoft Corp. has scorned Ellison's idea of a diskless network computer since he introduced it one year ago, but Ellison believes the software giant will change its tune.

"They turned around on the Internet, and they will turn around on the network computer," Ellison said.

Ellison questioned Netscape Communications Corp.'s decision to spinoff a company to produce a trimmed-down version of its browser for consumer devices, saying that the job is "so important that Netscape should be doing it by itself."

"Netscape should be the one pursuing NCs very aggressively," Ellison said. "They're not. They're locked into PCs, and I think it's hopeless to compete with Microsoft because the Internet will be in the next version of Windows."

When asked to comment on what he would have done to save Novell Corp., where CEO Robert Frankenberg announced his resignation in early September, Ellison said he would not have taken the job.

"Novell is destined to become a niche player," Ellison said. "You can only change strategies so often."

Ellison also said that he would not buy Apple Computer Inc. -- even though a lot of good technology and products remain at the company -- because he doesn't understand the company's strategy.

"I have a soft spot in my heart for Apple," Ellison said, noting that founder Steve Jobs, now CEO of Next Software Inc., is his best friend. "Steve feels like it's a lost child and it's very painful, and I'm not sure either of us know how to save it right now."

IBM's NC entry
Meanwhile, IBM introduced the Network Station, a stripped-down device for accessing the Internet, intranets and LANs, will be priced less than $700 and targeted at the business market, officials said. IBM plans to release other NCs later, they said.

The Network Station will be manufactured by IBM and Network Computing Devices Inc., which has already launched its own family of network computers. The machine will be available by the end of the year, officials said.

The Network Station can run over Ethernet and Token Ring intranets, and access IBM's AS/400, RS/6000, and S/390 servers running Java, Windows NT, Unix, or OS/2, officials said. It can also access Internet and Lotus Development Corp.'s Notes groupware applications. The Network Station will run Netscape Communications Corp.'s Navigator 3.0 browser, which will be customized for the NC by Netscape's new Navio spinoff, officials said.

The appliance measures 8 inches by 10 inches by 1¼ inches and weighs 2½ pounds, officials said. It uses an IBM PowerPC microprocessor, an unspecified amount of memory, a network adapter, keyboard, mouse and optional monitor.

--Sari Kalin, IDG News Service, Boston Bureau

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