What does this deal mean for the future of the CRM industry?
I think it’s important to take a deep breath and understand that although ownership has changed, that is largely a financial matter the financial economy is not the ‘real’ economy where products and services are bought and sold so that companies can do useful work. That said, I think it opens up a lot of opportunity it puts more substance behind CRM and Siebel. Oracle had been a #3 or #4 player in CRM and I don’t think acquiring Peoplesoft was the knockout punch that Oracle needed to become dominant in the space. But now with Siebel in the stable they have the #1 CRM provider with a great deal of overlap into the same enterprise customers Oracle has always sold to and the Oracle-Siebel Peoplesoft combination gives that combination the critical mass it needs to compete with SAP on the high end and others like Salesforce.com on the low end. Nevertheless, There is also plenty of risk inherent in this combination. Oracle
now has a combination of some very good products that don’t automatically work well
together. It’s sort of like having a Porsche engine disassembled on your garage
floor. Putting it all together is going to be critical. Meanwhile none of the
competition is standing still.
Is this a smart move for Oracle?
No, it’s stupid, frankly.
I have previously said that Oracle had lost its ability to innovate when it bought Peoplesoft. It would be better, I think, for a company like Oracle to invent something than try to take the Lego route. But obviously, Oracle decided that it was more expedient to buy the Legos and put something really big together. This is all too reminescent of the Comoputer Associates era when CA bought up mainframe software companies and milked their maintenance streams. Long term this is bad for Oracle and bad for Siebel but probably great for Salesforce.com, RightNow and many other on demand CRM vendors.
What does this mean for existing Siebel customers?
Not much. Part of taking a deep breath is to remember that the software these customers have still works, it’s didn’t expire at mid-night. Since many of these companies already have relationships with Oracle it might be greeted with a major yawn. The biggest question I have is what about IBM? Siebel is a partner with IBM in the on demand space. IBM sells Siebel CRM OnDemand and hosts it. How will this event affect that relationship?
Will there be any real choice left in enterprise CRM?
I think this leaves plenty of ‘choice’ in Enterprise CRM — Siebel continues to be a strong product and brand, SAP has new strength and companies like Salesforce.com have moved up in the pecking order. Salesforce has been making great strides in the enterprise and it wouldn’t surprise me if this event lends more clarity to the enterprise decision — to host or not to host becomes the biggest question. If that logic prevails, might it mean that CRM becomes more likely to be the application that enterprises host? And therefore might Salesforce.com be considered on a completely equal footing with the traditional vendors? This is a major positive for Salesforce.com.