Indeed, Oracle now is giving away its SalesOnline app on its Web site. Meanwhile, Sybase's data-mining software and IBM's WebSphere are getting bundled with third-party apps.
CRM represents a massive opportunity for vendors. AMR Research predicts that CRM sales will grow 35 percent annually, reaching $20 billion by 2004. Not surprisingly, huge systems and database vendors are starting to take giant steps into a space that smaller CRM specialists like Siebel Systems once held largely to themselves.
Vendors are attacking the CRM market in one of three ways: Oracle, for one, is creating CRM apps tied to its own database. A second option is to distribute middleware through CRM vendor partners, either free of charge or for some sort of fee. In the final option, vendors are integrating some CRM functionality directly into middleware.
Some in the industry are hinting that IBM is giving away WebSphere in certain partner bundles, in an attempt to gain CRM market share or stir demand for its own middleware. Oracle, meanwhile, now is openly advertising the free availability of Oracle applications like SalesOnline from its Web site.
Some experts are concerned that, ultimately, moves like this could drive the value out of application software.
But Wister Walcott, senior director for sales effectiveness at Siebel, says he isn't worried. Siebel employs 4,000 people and produces $1.4 billion in annual revenue. "And we're growing at the rate of about 100 percent per year," Walcott says.
Walcott likens the complicated mesh of vendor-to-vendor CRM relationships to a new car. "The surface might look smooth and shiny," says Walcott. "But when you open up the hood, it's, 'Oh my God!' "
In some situations, different parts of the same company are pursuing different CRM competitive strategies. Such is the case at both Sybase and Oracle.
Jack Sweeney, VP of worldwide partner development in Sybase's Business Intelligence (BI) division, is unabashed about his division's interest in integrating CRM applications into its data-warehousing environment.
"Our whole thrust is to embed applications into our infrastructure," says Sweeney.
In contrast to Oracle's approach, applications in Sybase's Industry Warehouse Studio integrate with multiple databases, notes Sweeney.
Sybase recently signed health-care specialist RGI as the first CRM vendor with resale rights to the BI application suite. Like Sybase's other ISV partners in the BI suite, RGI has integrated Industry Warehouse components like a logical design control center and a meta data manager directly into its application.
Sweeney won't comment on the revenue models for the reseller deals, except to insist that in no case is the Sybase software given away for free. "Not to be coy, but the deals are like snowflakes. Each one is a little different," he says. Sybase's other reseller partners for BI software include EDS and Agillion.
There are certain parallels between the strategies of Sybase and IBM. For instance, IBM B2B commerce exec Ed Kilroy points out that Big Blue has incorporated personalization into its WebSphere middleware. Kilroy adds that IBM is eyeing middleware integration of other core functionality from CRM, as well as from other types of application software.
Still, Kilroy doesn't see CRM specialists fading at all. He points to recent CRM vendor moves to expand into new vertical markets, acquire new technology, and forge alliances with B2B exchanges.
IBM's latest CRM alliance involves PeopleSoft. Under terms of the deal, announced last week, PeopleSoft will "lead" with IBM's WebSphere environment on customer sales calls, says Cynthia Erdman, director of strategy for IBM developer relations.
But a CRM partnership between IBM and Siebel, cut earlier this year, contains no such provision, according to Siebel's Walcott. Siebel also has partnerships with Sybase, Sun and Microsoft.
Oracle, given its database ties, prefers to tackle the CRM market alone and continues to attack Siebel's position.