Analysis & Commentary:

ORACLE WOOS CUSTOMERS WITH NEW, SOFTER SIDE

World No. 2 software maker, Oracle Corp, hit by falling applications sales, showed a newer, softer side to participants at a user conference in San Diego.

The Silicon Valley database giant, one of the most aggressive players in the rough-and-tumble sector, invited a customer lobby group to its Oracle AppsWorld U.S. customer conference for the first time, and recently assigned customer advocate duties to one of its key executives.

The shift, which took place last month when Oracle put senior vice president Mark Barrenechea in charge of tracking installations of its applications, couldn't have come at a better time, analysts said.

In its recently reported third quarter ended February 28, Oracle said applications sales fell 41 percent year-on-year to $147.9 million as the spending rebound it anticipated remained elusive.

Oracle, which gets the majority of its revenue from database software, has big hopes for its applications business but has been struggling to overcome early stumbles, intense competition and corporations' lingering unwillingness to invest in new technology.

Tom Wyatt, president of the Oracle Applications Users Group (OAUG), signaled that the independent customer organization and Oracle are healing their once-noisy rift.

The OAUG, a group of customers which lobbies for changes in Oracle software for the benefit of customer, has had fractious relations with the software giant in the past.

"We're cautiously optimistic that we're making progressive steps to improve the relationship," said Wyatt, who was a featured speaker at the AppsWorld conference.

Up until recently, OAUG did not participate in Oracle customer events such as AppsWorld. OAUG representatives got their first AppsWorld invitation in January, when Oracle held its European customer conference in Amsterdam.

Oracle alienated early applications customers by releasing its business-automation software when it was immature and buggy.

It has since been grappling to win a big foothold in the space, which is currently dominated by technology giants International Business Machines Corp and SAP AG.

Executives from MyFamily.com said they have seen Oracle make improvements to its business-automation software.

Melissa Davis, who oversees the Oracle technology that helps process about 4,000 business transactions a day at the Provo, Utah-based provider of information that can be used to trace family histories, said there were issues with early versions of Oracle's order management software.

"For the most part, they did patch it up significantly," said Davis.

"There are challenges with Oracle, but there's a lot that Oracle's brought to the table," Davis said.