In the man-bites-dog story of the Retail Delivery '98 conference this week, Lawrence J. Ellison said something nice about William H. Gates.

Mr. Ellison, chairman and chief executive officer of Oracle Corp. and one of the Microsoft Corp. chairman's more vocal antagonists, used a quotation from Mr. Gates to support Oracle's theories on the strategic importance of the Internet.

That turned out to be something of a sucker punch.

After completing his formal presentation to several thousand people at the Bank Administration Institute technology gathering, Mr. Ellison slammed Microsoft and said he thinks it is sure to lose its court battle with the government over antitrust allegations.

And, in another blast of more immediate relevance in the retail delivery arena, Mr. Ellison and Oracle entered the electronic bill presentment fray.

As part of a stepped-up financial industry strategy, they announced Internet Bill & Pay, a system for allowing businesses to transmit invoices electronically to customers and receive payments the same way.

The Redwood Shores, Calif., data base giant-with $7 billion of revenue, it trails only Microsoft among software companies-joins a stellar lineup of technology providers with designs on an emerging business that some observers expect will give a big boost to on-line banking and payments.

Microsoft is in bill presentment through Transpoint, its joint venture with First Data Corp. and Citibank. Checkfree Corp., Intuit Inc., Integrion Financial Network, Netscape Communications Corp., and a host of software specialists are also in position to sell into this market, or at least influence its development.

Oracle, which lists Checkfree as a "partner" and said its Internet Bill & Pay 1.0 version is in pilot testing ahead of a first-half 1999 release, sought to differentiate itself from Microsoft.

In a white paper distributed at the convention here, Oracle pointedly said, "Any bill payment and presentment solution ... must absolutely not be a Trojan Horse that outside solution providers can use for disintermediation of customer relationships."

Disavowing any such possibility for Internet Bill & Pay, Oracle said, "We are in the business of providing back-end solutions that extend and strengthen your customer relationships, and that's how we built our solution."

Mr. Ellison made the point bluntly in an interview with American Banker: "We are not Microsoft."

"We are not moving into payment settlement or financial aggregation or on-line financial sites," said Steven R. Perkins, Oracle's senior vice president for the financial industry. "We will not move into areas ... where Oracle would compete directly with financial institutions."

But its competing directly with Microsoft-not represented this year on the Retail Delivery main stage, where Mr. Gates appeared in 1995 and 1997- provided some of the best drama of the week.

Matthew Cone, on leave from Microsoft to serve as Transpoint's vice president of business development, said he viewed Internet Bill & Pay as "an in-house billing solution for billers' Web sites." A customer would have to go to that on-line location to retrieve an invoice-not Transpoint's vision.

"Transpoint is a service bureau providing an outsourced bill-delivery solution," Mr. Cone said. "We expect the consumer to go to a single 'mailbox' to pay bills-their banks' Web sites.

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He said most of the eight financial institutions Transpoint has signed are using its system to distribute electronic bills.

Oracle insisted that its system is flexible, based on open technical standards, and offers "support for multiple models." Both individual billers and bill consolidators could participate and "consolidators can adopt one or more of the several summary/detail consolidation models."

The Scandinavian telecommunications company Telia bought the Oracle system because of its biller-direct capability, said Svante Wallstrom, Telia's senior director of consumer marketing.

"We designed Oracle Internet Bill & Pay to serve the needs of both billers and consolidators," said Andy Felong, vice president of the Internet applications division. Either type of entity would be able to "reliably handle extremely large amounts of bill and customer information."

Matt Lewis, senior vice president of electronic commerce product management and marketing at Atlanta-based Checkfree, said he expects Oracle to succeed "due to its proven scalability and the fact that it is an open software platform designed to work across a variety of processing environments.

"Our partnership will allow billers access to an integrated solution: Oracle's robust Internet bill publishing solutions and Checkfree's comprehensive bill distribution and payment services," Mr. Lewis said.

Gary Craft, electronic commerce analyst with BancBoston Robertson Stephens, was more mildly enthusiastic. He called the Oracle system "well architected" but said the company's main motivation is to sell data bases, rather than a stand-alone bill product.

Despite the high-profile rivalries shaping up in the billing field, Mr. Ellison referred only briefly to Internet Bill & Pay in his BAI conference speech. He spent most of his time explaining the "Internet computing model," citing this quote from Mr. Gates on the Microsoft Web site: "Some day all of our applications and data will be combined on very large computers called megaservers." (See the accompanying Q&A.)

"I would be stronger than Bill," Mr. Ellison said. "It has to change" to rectify the "decentralized complexity" exacerbated by years of reliance on personal computers and multiple client/server configurations. The answer is to centralize data on a smaller number of large-scale server computers.

"Information consolidation will be essential if you are going to understand your customers better and your business better," he said.

He said that with the lowering of PC prices and the rise of the Internet, the "thin client" network computing model is already a reality, and bill presentment is a natural application.

Mr. Ellison said he concurs with the widespread talk that this can be a "killer app," but in an "explanatory" way. Once people understand bill delivery, it would lead to other innovations. "This is definitely one of the key applications that will break the logjam in that business," he said.

To emphasize his bank- and brand-friendliness, he pointed out that Oracle is a supplier to all of the top 10 consumer Internet commerce sites (including, CDnow, and E-Trade) and nine of the top 10 business sites (including those of Dell Computer, Cisco Systems, and First Union Corp., but not of International Business Machines Corp.)

"We enable all that commerce, but it is not our brand," he said in the interview. "We are a technology partner and provider."

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