Oracle signals 'no change' in CRM strategy

Nine months after the acquisition of Siebel, Oracle has told its users it plans to keep offering multiple CRM packages, at least for now
Written by Colin Barker, Contributor

Oracle has unveiled its strategy to deal with the merger of its Siebel CRM business with its core Oracle, PeopleSoft and JD Edwards CRM operations, and the key message is "no change".

The company plans to continue with all its current lines of business for the foreseeable future, with the promise of full integration through its Fusion strategy at some point.

At a conference for users and press in London on Tuesday, the company said it could offer few concrete details on future plans for the four existing CRM businesses, other than to insist that they would continue as they are under the same financial models and the same software.

But the company did say that Oracle/Siebel CRM will form "the centrepiece of the next-generation Oracle Fusion CRM applications strategy".

Oracle also said it had begun the integration of the Oracle E-Business Suite and Oracle's Siebel, PeopleSoft Enterprise and JD Edwards EnterpriseOne CRM products.

Oracle bought the Siebel business nine months ago, but said it only "completed the formalities" of the acquisition at the end of May. Oracle claims that it is "the market leader in CRM, with five million live end users and 150 million registered self-service users", but according to analysts Gartner, this claim does not stack up.

According to Gartner's latest figures, released on Monday, SAP is the market leader in CRM with $1.47tn (£800m) of revenue in 2005 and 25.6 percent market share. In second place is Siebel ($966m, 17 percent) and in third, Oracle, including PeopleSoft ($367m, 6.4 percent), giving a combined total of $1.3tn, significantly less than SAP.

Loic le Guisquet, the vice-president and head of Oracle's CRM business in Europe, admitted he had not seen the latest Gartner figures, but disputed them anyway. "They do those figures on what they are told are sales, but they are the most difficult of all in this business," le Guisquet said.

The rising star in the CRM business is still Salesforce.com which, according to Gartner's figures, saw its business grow by 77 percent last year. The other CRM vendors saw respectable growth of between 6.4 percent (Siebel) and 22.3 percent (Amdocs) with only Oracle seeing a loss (-11.7 percent).

According to le Guisquet, Oracle is looking very closely at the Salesforce model for its future growth. "We are basing our on-demand model on the one developed by Siebel," said le Guisquet. However, he rejects the Salesforce pure-play. "I strongly believe the dominant model will be the hybrid model," he said.

This hybrid model allows organisations to opt for on-demand only, a standards software licensing model only, or a mixture of both with more and more companies opting to use licensing at their larger sites and on-demand out in the branches.

At the conference, le Guisquet set out a new model for the future of CRM as seen by Oracle. "CRM has gone through major changes, and we see a big change in the way we use it," he said. "We have gone from a 'make and sell', where we made things and then sold them, to a world of 'sense and respond'."

Now we are moving towards the "customer-centric enterprise", le Guisquet said. The company has set out a long timetable for the development of Oracle Fusion CRM, which is not expected to arrive before 2008.

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