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Oracle may still be digesting a raft of big-name acquisitions - from PeopleSoft to Siebel - but, suggests Dawn Kawamoto, the future for the software giant is all about developing partnerships to carve itself a very large piece of a really big pie.

Its reputation as aggressor safely established, Oracle is now looking to make friends in an industry transformed by its own multibillion-dollar acquisition spree.

The software giant this weekend opened the doors of its Oracle OpenWorld customer conference, an event big enough to close off Howard Street in host city San Francisco.

Company executives are scheduled to deliver road maps on Oracle's primary products - databases, applications and middleware - as well as its "information management" strategy. Keynote speeches from large partners - AMD, Cisco Systems, Dell, HP and Sun Microsystems - are planned as well.

He's beginning to see he can't own the world, or he'll alienate customers. He's finding it's better to own 70 per cent of a real large pie, than all of a smaller one.
Oracle is likely to have more acquisitions ahead of it - with people speculating it could buy business intelligence or open source companies - but analysts expect the deals to be smaller than the blockbuster PeopleSoft and Siebel deals.

Instead of getting out its chequebook to boost revenue, Oracle is increasingly turning to partners, according to company executives and analysts.

It has begun to exhibit signs that it can't "own the world" via acquisitions and is beginning to show a change in attitude in working with other companies, even competitors, said Peter Kuper, a Morgan Stanley analyst.

Kuper said: "During their last conference call [to discuss quarterly results], I don't think a lot of analysts picked up on [CEO] Larry [Ellison's] subtle message. He said Oracle was willing to support BEA Systems, rather than saying something like he usually does like, 'why would anyone go somewhere else when Oracle can provide the software stack?'"

He added: "He's beginning to see he can't own the world, or he'll alienate customers. He's finding it's better to own 70 per cent of a real large pie, than all of a smaller one."

Oracle's "hot pluggable" middleware software, used to underpin its ebusiness applications suite, is designed around standards, which means it can be swapped out with open source and competing products. That technical design is also meant to attract partners, such as application builders catering to small businesses.

Having a rich network of third-party products based on Oracle's software helps fill the "white spaces" - aka gaps - in Oracle's own portfolio.

It also creates broader market acceptance of Oracle's middleware, which could ultimately displace the infrastructure software from competitors as application customers make upgrades.

During the company's most recent profits call, Ellison said: "We're trying to be best in class - open and hot-pluggable with competing components. But we hope over time, if Oracle does a good job in delivering its components, [customers will] use our completely integrated suite, as opposed to trying to mix and match amongst multiple vendors."

Apart from whether there will be another an acquisition, or confirming rumours that Oracle will offer its own Linux distribution, perhaps the most pressing question for Oracle's top brass is the status of its Fusion Middleware.

Having bought several application companies, Oracle has sketched out the multiyear Fusion program to have those companies' disparate lines run on Oracle's back-end software, such as application servers and portals. The lines include software from JD Edwards, PeopleSoft and Siebel Systems.

Fusion could generate significant revenue as existing application customers upgrade to the common software foundation, analysts have said. It is also the software that third-party application providers need to build on, in order to sell their products to Oracle customers.

As a result, middleware has become a key battleground for Oracle with rival SAP. The two are vying for the attention of partners and corporations that are adopting a modern, modular system design called a services-oriented architecture.

SAP has developed infrastructure software called NetWeaver that is now shipped with SAP applications, according to a representative for the German company.

In this race, Oracle has the advantage of having a well-established, rapidly growing middleware business separate from its applications business, Forrester Research analyst John Rymer said.

He said: "Oracle is definitely further along in creating a solid, comprehensive platform than SAP. They are proving themselves in the open market, competing head-to-head in middleware with IBM, BEA and Microsoft."

The largest software vendors - Microsoft, IBM, Oracle and SAP - have each made a priority of growing their "ecosystem" of partners and third-party products.

At a developer conference last week, SAP announced efforts to expand its network of NetWeaver-certified products, including a separate licence for developers and investment from its $125m NetWeaver Fund.

Oracle, by contrast, has historically taken a different path by raiding the enterprise software market for the pieces of technology it needs. In the process, it has gained thousands of new customers through the acquisitions of PeopleSoft, Siebel and other former software stars.

It has not yet "institutionalised" partner collaboration in the way Microsoft has or SAP is trying to do, Forrester's Rymer said.

Still, there has been some change at Oracle, according to Bryon Sebastian, the CEO of open source services company SourceLabs, which announced a partnership with Oracle earlier this year. He said its technical and business strategy articulated during the past few months accommodates partners well.

Sebastian said: "People have been very impressed in how quickly they've moved and executed their strategy. There's been a noticeable uptick and traction in Oracle middleware strategy, when they weren't so much a factor 18 months ago."

In regards to Oracle potentially endorsing a Linux distribution other than those from Red Hat and Novell, Sebastian said: "The more competition in the Linux space, the better for the industry and the players in the industry. There are underserved needs in the Linux market."

AMR Research analyst Bruce Richardson said the goal for Oracle is to get its middleware components and its grid database approach adopted as the de facto "platform" for enterprise applications.

Richardson said: "Ironically, they are going to position themselves as more open than SAP." Oracle's Ellison has argued that buying from a single vendor is superior to picking and choosing the best from a ranger of providers.

He added: "Oracle always made the business case that you can't buy a separate [database and middleware] stack from the application. Now they're trying to be 'Miss Congeniality'."

Dawn Kawamoto writes for CNET News.com

Oracle making friends article