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By Sonya Rabbitte, 27 June 2002 17:00

NEWS Oracle has boosted customer interest in its ASP model with European take-up increasing more than tenfold since the beginning of this year. However, the company has still got a long way to go if it is to meet its own target of moving 50 per cent of customers to hosted software within five years. Oracle claims 120 new European customers have opted for hosted software since January 2002. In the nine months prior to that, just 10 EMEA customers had joined the ASP service, Oracle.com. Worldwide, Oracle's ASP customers have risen from 150 at the beginning of this year to 450. However, this figure pales beside Oracle's 12,000-strong global customer base. Speaking at Oracle's annual European conference in Copenhagen this week, Sergio Giacoletto, executive vice president of EMEA, admitted that take-up was slow but beginning to pick up. Although he made no mention of the 50 per cent migration target that cropped up so often at Oracle's Appsworld conference earlier this year, he said the company is getting more aggressive in its marketing push. Sales staff are now trained to offer customers an outsourcing option, hosting will be offered in every contract and for the first time every country has outsourcing sales targets to meet. And despite poor take-up, minimum fee requirements ensure that Oracle is making money on hosting. If Oracle hosts the software customers are charged five per cent a year on top of their licence fee - a supplement which must be a minimum of $6,000 a month. Customers who host themselves pay three per cent - or a required minimum of $4,500 - a month. But Barry Goodwin, vice president EMEA of Oracle.com, said customers were still confused over the exact nature of Oracle's offering. He said: "There is a lot of fear and doubt surrounding the ASPs who came into the market and came out again very quickly. Oracle was never an ASP. We never went out and bought data centres in expensive areas, we never professed to manage anyone else's software, we never went for the transaction model. But customers confuse us with that." Twenty-five per cent of business in EMEA in the next three to five years could come from hosting, claimed Goodwin, and European hosting revenue could stretch to $500m when consulting and licence fees are accounted for. Worldwide, senior officials have said the company will make $1bn from hosting by 2005. Total revenue for the fiscal year 2002 was $9.7bn.