Oracle Puts Foot in Mouth with New ASP Strategy

In a move Larry Ellison swore it would never make, Oracle Corp. has broadened its application service provider (ASP) strategy and expanded its iHost Partner Initiative to include value added resellers (VARs).

Originally the iHost Partner Initiative was designed to meet the needs of independent software vendors that are moving their applications to a hosted model. Under Oracle's new plan, however, VAR partners will provide hosting services for customers based in the Oracle ( e-business suite. The new VAR partners will be called Oracle authorized application providers (OAAPs). OAAPs will be providing services such as integration with legacy and custom systems, develop and sell value-added services that extend the use of Oracle's e-business suite. Some of Oracle's new partners include Agilera, BlueMeteor, Center7, and Interliant.

According to Zona Research (, last fall, Oracle's CEO Larry Ellison said that Oracle would only sell its own software to APSs, "over my dead body." Apparently this is no longer the case since Ellison is still alive and well. "Oracle has recognized that ASPs can and do add value to an ISV's applications and that the ASP model can be an effective distribution channel for hosted applications," says a recent Zona report. --Alicia Costanza

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.