Oracle aims for Salesforce.com's jugular

The software giant is baying for the hosted CRM software leader's throne, even as it continues to tout a hybrid sales model; but Salesforce is unfazed.
Written by Jeanne Lim, Contributor

SINGAPORE--Saleforce.com will have to watch its back as software colossus Oracle has declared that it has plans to go after the hosted CRM software incumbent's turf in the near future.

"Oracle will continue to procure crazy licensing fees."
-- Steve Russell
CEO, Salesforce.com Asia-Pacific

During a customer relationship management (CRM) roundtable held Monday, Paul Appleby, vice president of Oracle Asia-Pacific's CRM business, told a roomful of journalists: "Salesforce.com will no longer be in an uncontested market [for software on-demand]. Over the next few months, we're going after this market."

Oracle has previously announced that it will release Siebel 8.0, Oracle E-Business Suite CRM 12.0, PeopleSoft CRM 9.0 and J.D. Edwards 9.12 over the next 12 months.

Salesforce is undoubtedly the rising star in a galaxy of CRM vendors. According to Gartner's figures, the company saw its business grow by 77 percent last year. In comparison, Oracle saw a loss of 11.7 percent, while Siebel grew 6.4 percent and Amdocs grew 22.3 percent.

Admitting that the pre-merger Siebel failed to capitalize on the hosted CRM software opportunity, thus conceding market dominance to Salesforce, Appleby said: "Siebel didn't go after this marketplace. We are [now] going after this market aggressively."

According to a recent report by AMR Research, the market potential for hosted CRM is huge.

The report stated that the worldwide CRM market grew to US$11.7 billion in 2005, up 8 percent from 2004. This was buoyed by sales of hosted-CRM subscriptions, which grew 60 percent in 2005 over 2004. Sales in the CRM industry are expected to continue climbing this year to US$12.9 billion, according to AMR.

However, Appleby made it clear that Oracle will stick to its hybrid sales model. Insisting that feedback from Oracle enterprise customers indicate users want choice, a benefit that comes with a hybrid model, he said: "We have the ability to deliver both on-premise as well as on-demand solutions."

If the folks at Salesforce feel threatened by Appleby's statements, they certainly are not showing it.

When contacted by ZDNet Asia about Appleby's remarks, Steve Russell, CEO of Salesforce.com Asia-Pacific, said: "Oracle-Siebel CRM is of little threat to Salesforce.com, in fact, it represents a great opportunity."

Russell added that with the likes of Oracle, Microsoft, and SAP acknowledging that SaaS (software as a service) is the future of software delivery, it validates the Salesforce's "mature" business and technology model.

"Many of their customers are using this as an opportunity to re-evaluate their CRM solutions, weighing up the options, and coming straight to us," he said.

Scoffing at Oracle's hybrid-model stance, Russell added: "Oracle will continue to procure crazy licensing fees, while partially acknowledging that the market is demanding an alternative to the client-server model.

"Oracle's hybrid model is a mousetrap that will snare companies in, and get them caught up in the costly and restrictive cycles associated with on-premise solutions."

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