Oracle: SMBs look beyond hosted CRM

Software giant will target small and midsize businesses in Asia, focusing on a combination of on-premise and on-demand CRM applications.

SINGAPORE--Where customer relationship management (CRM) software is concerned, small and midsize businesses (SMBs) still want more than an on-demand delivery model, says an Oracle executive.

Will Bosma, vice president of CRM for Oracle Asia-Pacific, said at a media briefing Tuesday that even though hosted CRM is a growing market, a "vast majority" of SMBs still look for software to be delivered the traditional way, or "on-premise".

Making reference to Gartner statistics, Bosma noted that the Asia-Pacific CRM market will grow at a five-year compound annual growth rate of 17.9 percent, to reach US$679.6 million in 2010. The research house estimates that software-as-a-service (SaaS) is a fast-growing segment in the CRM space, but Bosma said that revenues from this sector will still make up a smaller portion of the overall market. Citing figures from Gartner, he noted that by 2011, only 25 percent of new software revenues will be delivered as SaaS, while 75 percent will still be implemented on-premise.

The nature of SMBs is diverse, he said, some of which operate like larger enterprises while others are "corner stores". As such, they "require a continuum of delivery options for technology…to grow with their needs [and] protect their original investments," said Bosma.

Oracle's SMB strategy for CRM applications is aligned with its overall strategy for enterprise customers. The company also offers a hybrid model--a mix of hosted and on-site delivery models--as well as purely hosted and on-site delivery mechanism, because its customers appreciate having choice.

Oracle's SMB offerings currently available in the market include, the Oracle Siebel CRM Professional Edition, privately-hosted Oracle On Demand for Siebel CRM Oracle, and Oracle Siebel CRM on Demand. Cost of deployment ranges from the low-end US$70 per user for the Siebel CRM on Demand application, to a starting price of US$995 per user for the Oracle Siebel CRM Professional Edition.

Other business applications vendors are also intensifying their focus on the SMB market. In a statement released Monday, SAP announced that it has established a new business unit dedicated to SMB customers. The unit will be managed by Hans-Peter Klaey, the current president and CEO of SAP Asia-Pacific. This follows its February announcement to focus on midsize customers through its network of channel partners.

Microsoft, still a relatively young player in the business applications space, is also expected to roll out a hosted version of its Dynamics CRM software next year, with an initial focus on small businesses.