Oracle's U.S. midmarket apps bundle delayed

 Oracle Corp. is facing delays in bringing to market a U.S. version of its E-Business Suite Special Edition, a package of enterprise applications delivered ready to run on a hardware server by Oracle resellers and targeted at midsize companies.

First introduced in Asia and Europe in 2002, the E-Business Suite Special Edition was planned to be available in the U.S. by the end of 2003, Oracle representatives have said. However, the software maker is still working with some of its reseller partners to bring the product to market and is recruiting more partners.

"The product is not available to all partners yet, we're kind of working through the process with a few select partners," Oracle spokesman Sean Mills said this week.

Those select partners can already sell E-Business Suite Special Edition, according to Mills. However, he would not disclose who those partners are or how they were selected. "We're not done recruiting partners, so we're not giving out the partner names. We're waiting to formally announce it until we're further along."

Oracle partner Sierra Atlantic Inc. is interested in selling the E-Business Suite Special Edition, but doesn't expect the product to be available until May, when Oracle wraps up its 2004 financial year, or possibly even later in the year, said Marc Hebert, executive vice president of marketing and alliances at Sierra Atlantic in Fremont, California.

"The upshot of what I am hearing here is that the product will be available before the end of Oracle's financial year," Hebert said in a telephone interview from Oracle AppsWorld in San Diego this week. Oracle ends its 2004 fiscal year on May 31. "I don't think Oracle has figured out the U.S. channel strategy just yet."

Katherine Jones, a managing director at market analysis firm Aberdeen Group Inc., agreed that setting up a value added reseller, or VAR, channel for the E-Business Suite Special Edition is a significant task.

"I suspect Oracle is waiting (with its product announcement) until they have a significantly strong and competitive VAR channel for the midmarket. The kinds of VARs that sell to the small and midsized market are a different company than the typical Oracle partner," she said.

For Sierra Atlantic, the Oracle midmarket offering would be a nice fit. "It is a great product that has real potential in the lower end of the midmarket. It is a new market opportunity for companies like us," Hebert said. Sierra Atlantic's current "sweet spot" is in the higher end of the midmarket with customer with between US$150 million and $500 million in annual revenue, he said.

Oracle is tight-lipped about U.S. product details, but has said that the product concept is the same as in Europe and Asia. In Europe, the concept is to offer a product that costs under €100,000 (US$124,000), requires little customization and can be up and running within a month.

E-Business Suite Special Edition includes the accounting, order management, inventory management and purchasing modules of the Oracle E-Business Suite and is designed for up to about 30 users. If more user accounts are needed, a company has to upgrade to the full E-Business Suite, Oracle has said.

Oracle defines the U.S. midmarket as companies with between 20 and 999 employees and between US$20 million and $1 billion in annual revenue, the company has said. However, E-Business Suite Special Edition won't be solely target at the midmarket, it will also be marketed to for use in branch offices or subsidiaries of large enterprises, Mills said.

"We're letting the market define itself and that is companies looking for deployments with between 10 and 30 users," he said.

The E-Business Suite Special Edition offering puts Oracle in competition for midmarket companies with rivals SAP AG and Microsoft Corp.'s Business Solutions unit, among others.