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Oracle's Groupware Challenge

In early July, Oracle purchased Steltor, a small and relatively unknown groupware developer (See "Oracle buys calendar software firm"). Just a week later Oracle announced its intention to offer the suite as its own entry into the low-growth groupware arena (see InformationWeek's "Oracle Tackles Collaboration Via New Suite").

IBM's Lotus unit and Microsoft have owned the groupware space. But kinks are beginning to show in their armors. Oracle's moves come at a time when Microsoft shops are re-evaluating the strategic direction of their collaboration implementations and Lotus is getting dismissed as a player more often than not. Although it is unlikely an e-mail client other than Lotus Notes will replace Outlook, Oracle can avoid the client issue entirely by adopting Steltor's Outlook Connector, which plugs into Outlook and lets it become a full collaborative client for the company's newly acquired line of calendar and messaging servers. The acquired servers run on a variety of Unix, Linux and Windows platforms, so Oracle enters the race with a full offering rather than having to play catch-up.

Can Oracle make a difference in collaboration? Potentially. Many organizations are openly showing their resentment regarding Microsoft's forced upgrade and licensing cycles, and Oracle may offer a way out. But the software developer needs to consider pricing of the new collaborative offering very carefully--something Oracle has been unwilling to do for its database products. Microsoft has gained ground with its database product because its up-front cost has been considerably easier to swallow, while Oracle's pricing has scared the pants off most IT buyers. As Microsoft fiddles with its licensing terms and IT organizations pay more attention to total cost of ownership (which includes long-term support and upgrade costs), an Oracle offering may be a less bitter pill to swallow than it has been.

--Lori MacVittie, [email protected]