PaineWebber Inc. is switching nearly 500 of its database servers from Sybase Inc. to Oracle Corp. technology.

The New York investment bank announced that it will install Oracle servers in each of its 385 branches plus an additional 100 servers in its main office to support data for 25,000 users in areas such as electronic commerce, private client, foreign exchange, and trading applications.

PaineWebber chose Oracle after a 15-month assessment of database server software from Sybase, International Business Machines Corp., and Microsoft. It concluded that Oracle will become the leader in distributed database technology, said Eric Rabinowitz, corporate vice president of data resource management at PaineWebber.

Oracle’s many financial services clients include Chase Manhattan Corp., First Union Corp., and Citigroup Inc.

The PaineWebber deal, which was announced Thursday, “plants us more firmly into the market and really puts our competition on the ropes,” said Anthony Fernicola, senior vice president of financial services for Oracle.

PaineWebber has been using technology from Sybase, of Emeryville, Calif., since 1991. “Based on new initiatives as well as some changes in technology and in Sybase as a company, we decided to look at alternatives,” Mr. Rabinowitz said.

He said Oracle’s technology will “provide a solid foundation for all of our applications companywide, while speeding time-to-market for emerging e-commerce services, which will in turn help our financial advisers better serve their clients’ needs.”

The conversion has already started and will shift into high gear next year. as a mandate to restrict new technology initiatives is lifted now that PaineWebber is completing the integration of the systems of its merger partners, JC Bradford and UBS Warburg, Mr. Rabinowitz said. He said he expects the conversion to take two or three years.

Bill Bradway, a research director at Meridien Research, said the PaineWebber contract is “a significant deal for Oracle to boost its market share in the securities industry, and how they perform with PaineWebber will determine how big this is to open the door for other securities firms that run on Sybase.”

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