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B2B Integration : A Practical Guide to Collaborative E-commerce

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Enterprise Application <strong>Integration</strong> (EAI) 101<br />

HOW ORACLE RE-ARCHITECTS ITS GLOBAL<br />

INFRASTRUCTURE INTO A CENTRALIZED<br />

E-BUSINESS ARCHITECTURE<br />

Oracle Corporation, like other large corporations had built a huge,<br />

distributed, worldwide culture based upon a client/server-computing<br />

infrastructure. For example, the company had 60 disparate financial<br />

systems in 60 different countries and 120 e-mail databases globally.<br />

Oracle was spending $600 million annually on global IT operating<br />

costs and the support of 1500 IT personnel <strong>to</strong> maintain them. The<br />

profit margins of the company were only 20% rather than 60% that<br />

successful software companies usually experience.<br />

Through a closer scrutiny of their business processes, the<br />

management realized that the 60 independent profit centers of the<br />

company created expensive redundancy uncontrolled spending, lower<br />

productivity and huge maintenance bills. The company was spending<br />

uncontrollably, adding more databases, applications and client/server<br />

infrastructure <strong>to</strong> support the phenomenal growth, while exponentially<br />

increasing the complexity.<br />

Realizing this, the company began a rather <strong>to</strong>ugh, but rewarding<br />

journey of re-architecting its systems in<strong>to</strong> a centralized e-business<br />

model that dramatically reduced maintenance on the desk<strong>to</strong>ps,<br />

inherently eliminated unnecessary servers and databases and greatly<br />

reduced IT and maintenance cost. For example, Oracle consolidated<br />

97 e-mail servers and 120 databases in<strong>to</strong> 4 servers running 4 databases<br />

and implemented a 'direct standards' model that allows it <strong>to</strong> maintain<br />

and update centralized applications worldwide from a single,<br />

centralized data center. Through this re-architecture of its systems,<br />

Oracle has reduced its operating budgets from $600 million <strong>to</strong> $440<br />

million annually.<br />

Source: Condensed from keep It Simple: How Oracle Consolidated Its Global<br />

Infrastructure in<strong>to</strong> a Centralized E-Business Architecture, Oracle White Paper.<br />

4.4.1. A word of caution<br />

Unfortunately, most IT shortcomings exist even <strong>to</strong>day. One only needs<br />

<strong>to</strong> substitute the term 'Web-based' for 'client-server' <strong>to</strong> see this. The

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