Oracle targets small business with Web services

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By Joris Evers

(IDG) -- Oracle has extended its online services offering to businesses with fewer than 100 employees with its Small Business Suite, a range of services accessible only via the Web.

The online applications, powered by NetLedger, allow companies to manage key business processes online such as financials, CRM (customer relationship management), purchasing, payroll, and electronic commerce, Oracle said in a statement. NetLedger is majority-owned by Oracle Chairman and Chief Executive Officer Larry Ellison.

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"In the future, small businesses will get automatic integration with our E-Business Suite for large companies, allowing them to do business much more cost-efficiently and effectively," said Jeremy Burton, a vice president of marketing at Oracle.

Traditional enterprise applications have been too expensive and complex for small businesses to implement. Offering the applications online solves those problems and allows small businesses to gain the same efficiencies as large businesses, Oracle said.

Charles Homs, senior analyst with Forrester Research in Amsterdam, said that although the cost aspect has changed, the complexity issues remain.

"The software is still complex and requires a course to understand; it is not as simple as an Excel spreadsheet. I think there is a market for these services, but this is not an offering that will change the market," Homs said.

"As most of its competitors, Oracle has made several attempts to sell its products to small businesses. It never worked because the software was too complex," he added.

Paula Breedveld, a software analyst with IDC, agreed and said that Oracle will have a tough time selling its new offer, especially in Europe.

"Small businesses tend to choose applications, including hosted applications, from smaller vendors. This could have to do with market perception; Oracle is a giant and is perceived to be too big for small businesses," she said.

Oracle officials said the NetLedger software is simpler than other Oracle software and has been tried and tested by small businesses. Oracle considers Microsoft's bCentral small-business suite as a main competitor for this initiative, they said.

The Small Business Suite is available immediately in English with support for U.S. and Canadian tax requirements via Oracle.com. The introductory price is $99 per month, with additional seats priced at $2 to $20 per month depending on the application. Future versions for global users are in the works, Oracle said.

The $99 package includes accounting and CRM with access for five users, payroll for one company, 20 online transactions via online bill pay, one Web site with a storefront, an employee center for 25 employees, and unlimited telephone and e-mail support.

Each item can also be purchased individually. Accounting is priced at $9.95 per user per month; CRM costs $19.95 per user per month; payroll is $14.95 per month; the employee center is $9.95 per month for five employees; and online bill pay costs $15.95 for 20 transactions. A Web site (without storefront) costs $19.95 per month; with storefront the service costs $49.95 per month, according to Oracle's Web site. All charges are billed annually.

Joris Evers is an Amsterdam correspondent for the IDG News Service, an InfoWorld affiliate.