Oracle deal does little for CRM
The ecosystem of the CRM pond is simplifying rapidly. With Oracle's latest acquisition, Larry Ellison is helping depopulate upmarket CRM providers much as a pike clears away the perch: Siebel joins the remains of PeopleSoft and JD Edwards in the belly of the beast. For Oracle, this is growth by acquisition: the rest of the industry could be forgiven for seeing it as consolidation and the slow erosion of choice.
That's a bad sign. In all of the self-congratulatory publicity and analyst-friendly explanations, little has been said about the software itself. While Siebel correctly identified and efficiently exploited a market segment, it was far better at selling software than making it. The more interesting side of the company was involved in partnerships with IBM and Microsoft, none of which is unlikely to find favour with Larry Ellison; Oracle has bought customers, not key technology.
Oracle has also fended off potential competition. Either IBM or Microsoft would have made a more interesting purchaser of Seibel — IBM to flesh out its application stack on top of DB2, Microsoft to promote its slow march into the upper echelons of corporate data respectability. Now, both companies face a far tougher fight if they want to become serious competitors in CRM — again, the effect will be to chill development in a market that is far from overburdened with bright new ideas as it is.
Which leaves competitors such as Netsuite and Salesforce.com, each of which pronounces themselves delighted with the demise of their biggest foe. They will do best if Oracle is happy to impose its old-fashioned licensing ideas on Siebel's customers, or if either IBM or Microsoft gets stung into breaking out the chequebook. With Ellison the majority investor in Netsuite and still a considerable part of Salesforce.com, there may be considerable resistance to taking the latter path.
As for the end users, the menu is looking like pike or nothing. CRM has never had the most palatable range of choices, but that is positively tasteless.