2. STANDARDS STRATEGY in a GLOBAL SOFTWARE BUSINESS ANSI Annual Conference 15 October 2002 Washington, DC D. R. Deutsch, Vice President Standards Strategy & Architecture

3. AGENDA  Historical Perspective – THEN & NOW – Software & Standards Marketplace – Oracle’s Products  Standards Approach – Organization – Philosophy  Standards Setting Organizations – Proliferation of Consortia/Pseudo-Consortia – Evaluating SSOs

4. THEN: US Dominated Global IT Market  Strong Domestic IT Industry – US domiciled producers – Many/varied consumers – Entrepreneurial environment  Robust De Jure Standards Process – Domestic: ANSI, X3/NCITS/INCITS – International: ISO/IEC JTC 1  Minimal US Government Involvement: – De jure standards based procurement – No Regulation  US Leadership/Control of International Standards

5. ORACLE = RELATIONAL DATABASE  Oracle Founded in 1976 to bring Relational Database Management System (RDBMS) to Market  SQL Database Language (1986, 1989, 1992,…, 1999) – (One of) the most successful standards of last 20 years  ALL RDBMS products implement/conform – Facilitated creation/growth of RDBMS market  De facto (marketplace) standard  De jure (formal) standard in ANSI & ISO/IEC  SQL Standards Helped Oracle Become the 2nd Largest Independent Software Vendor in the World

6. NOW: US Still Dominant BUT…  Changing International Standards Environment – Coordinated EU vote(S) in ISO/IEC JTC 1 – Declining US interest/influence in de jure forums  Less agreement on shared issues/concerns in US  De Jure Software Standards Forums Focusing on: – Standards maintenance – Incremental enhancement of existing standards  Consortia & Pseudo-Consortia Forums of Choice for New Software Related “Standards” Work

7. ORACLE = Not Just RDBMS Anymore  Expanding Beyond Core RDBMS Products  Focus on Internet Computing – Fully integrated, web-enabled applications  Front office: CRM  Back Office: ERP – Internet development tools – Database and application servers  Internet Computing => Standard Interfaces/Protocols  Standards Are More Important Today Than Ever

8. Global Standards Approach  Bottoms-up Versus Top-down  Business Units Drive Standards Participation – Customer/product requirements determine relevance – Importance to business units determines investment  Corporate Functions Support Standards Activities – Standards Strategy – Legal – External Affairs

9. ORGANIZATION CEO Legal Chief Architect Standards Strategy External Affairs Servers DB & App Apps ERP&CRM SW Dev Tools Sales & Prof Svcs Standards & Consortia ForumsPolicy & Legal Groups

10. Functional Areas (Business Units)  Responsible for Costs – Participation Fees – Personnel Resources – Travel expenses  Champion Technology and IPR Issues  Involve other Business Units: – Solicit inputs – Report activities  Customer/Product Requirements Drive Standards Participation

11. Standards Strategy  Orchestrates Company-Wide Participation in Standards and Consortia Forums  Develops Corporate Standards Strategy  Facilitates Participation in and Communication About Standards Bodies  Identifies and Coordinates Activities in Areas that Cross Business-Units: e.g., Java, Security, XML  Participates in Policy and Oversight Bodies

12. Legal  Evaluates and negotiates agreements governing Oracle's participation in standard setting bodies – principal concern is IPR rights and obligations  Participates in patent policy development in certain standard setting bodies, e.g. – W3C – Java Community Process – ANSI  Evaluates legal risks to Oracle in complying with standards  Monitors legal developments – advises on impact to Oracle – participates in lobbying / policy making

13. External Affairs  US Government Relations – Advocacy in legislative & executive branches – Industry associations  International IT Policy – Direct representation, e.g., OECD – Through third party, e.g., USISTO in China  Alerts Business When Governments Consider Standards Related Issues

14. Determining Company Positions  Most Decisions are Made by Directly Impacted Business Units  Key is Recognizing When Issues Impact Other Company Functional Areas  Use Transparency: Proposed External Positions Made Visible Throughout the Company – Passive communication, e.g., “Unless you advise otherwise, the Oracle vote will...” – Provide opportunity for discussion before positions are finalized & communicated outside business

15. Oracle’s Standards Philosophy  As the Internet Goes, So Goes the Software Industry – any standards that facilitate internet computing are good for the software industry and for Oracle  Standards do NOT result in sustainable competitive advantage  Standards are means toward satisfying customer requirements NOT ends  Product Strategy Drives Standards Strategy

16. Proliferation of Consortia/Pseudo- Consortia  US Companies Investing More in “Standards” – $ for participation fees – Technical personnel resources  LESS Into Formal Standards Bodies  MORE Into Consortia & Pseudo-Consortia  BUT Outside the US, De Jure Standards Still Dominate – European Union – Developing Countries

17. Evaluating Standards Setting Organizations  Standards Succeed ONLY IF Widely Implemented  => Standards Setting Organizations MUST: – Be OPEN to ALL interested parties – Provide a level playing field – Produce specifications that can be implemented by the widest possible community => royalty free  Many SSOs Do NOT Satisfy These Criteria – Most Pseudo-Consortia – Some Consortia

18. Dr. Donald R. Deutsch, Vice President Standards Strategy and Architecture Oracle Corporation 500 Oracle Parkway, 5op3 Redwood Shores, CA 94065 (650)506-2275 Work (650)303-7096 Cell (650)726-9562 Home donald.deutsch@oracle.com Contact Information