Oracle CRM: spot the disconnect
Despite all the glowing reports about Oracle SocialCRM among my fellow bloggers here and elsewhere, I had an uncomfortable feeling. Something didn't quite jibe with me. Step back about three months when I attended an internal Oracle EMEA marketing meeting. I saw Sales Prospector and listened to the pitch but was sort of impressed but not totally bowled over. Somehow I couldn't connect the inclusion of Yahoo! News and Google as being remotely 'social' though I did get the bit about connecting with others. Oracle then pitched it at Enterprise 2.0 Boston. While the pitch might have been OK in another setting, the audience was pretty hostile.
This is so typical of the software industry. A meme gains traction, enough noise is made for it to become a talking point and wham! Before you know it, every man and his dog is adding the meme or moniker to whatever the next thing is that they're peddling. It used to be the case that such memes came from industry analysts, notably Gartner, doyens of the Three Letter Acronym or TLA. That's how we got ERP, CRM, SCM, BPM, BPO...you get the picture. Now it's the social media crowd hanging out at Techmeme that get to make the noise.
Don't get me wrong. Sales Prospector is a very good looking product and the demo I saw was slick at the surface level and the interface is a darned sight better looking than most I've come across the last few years. Then the penny dropped.
In and among the hubris, Larry Dignan caught up with Anthony Lye, senior vice president of the company’s customer relationship management software unit, quoting him as saying:
“The CRM business at Oracle is growing significantly in every single region. It’s growing at double digit on premise and in triple digits for on demand”
Eh? How does that match up to what was said on the earnings call? If you check this Oracle earnings transcript post from 18th September at Seeking Alpha, you'll see there is very little emphasis on CRM. Four mentions, none of which make the same claims. That despite there is a major internal push and the emphasis it received at OpenWorld. Instead, Safra Catz, the company's co-president and CFO said:
Our applications license revenue contributed $331 million in the quarter and that is down by 12% in the quarter, primarily due to the 65% applications growth we had last Q1. We are extremely pleased with our execution and growth in our applications business, since our application license revenue has more than tripled over the last three years.
Spot the disconnect? If CRM is so good wouldn't the company yell that from the rooftops? They're pretty good at that sort of thing. Instead, the only deal they mentioned was Farmer's Insurance where they beat out Salesforce.com and SAP. Or maybe it's the other stuff Oracle sells, like good ol' databases that's taking the hit? But the biggest problem I have with Oracle and SocialCRM in particular is that we are way too early in the cycle for this type of product in the broad enterprise market and at a time when IT budgets are being crimped.
Oracle will need to make an incredibly good business case for this to fly. Current evidence is clearly divided. So while the UI and graphics are a welcome step forward, that isn't enough to win over customers who will be asked to shell out more in license fees plus the inevitable 22% support cost.