Will Oracle’s Freebie Shot Hurt (Or Only Graze) Siebel?

Will Oracle's Freebie Shot Hurt (Or Only Graze) Siebel?
P.J. Jakovljevic - October 6, 2000

Event Summary

In August, Oracle Corporation, one of the largest providers of software applications for e-business, announced that over 400 large to medium enterprises in over 15 countries are actively managing their sales activities with OracleSalesOnline.com, the new, free online service that provides businesses with immediate access to Oracle's enterprise-strength sales force automation (SFA) products. OracleSalesOnline.com seems to have an appeal to companies of all sizes, from start-ups to Fortune 500's, and from all sectors of the market, including financial services, telecommunications, consumer packaged goods, consulting services and technology. Companies currently using OracleSalesOnline.com include: Acrossworld Communications, Businesshere.com, C3 Communications, Campusinsiders.com, Carwashers.com, Cintra, Davanita Design, Dev-sol.com, Enterprise Rent a Car, Financial Finesse, MediMorphus, Montage eINtegration, Netledger, NewGen Software, NIC Company, OhioOnline.com, SCI, Speedgreetings.com, US Can, and Xtreme.com.

OracleSalesOnline.com delivers Oracle's sales automation applications via the online model using the same enterprise application traditionally delivered on a CD. Designed to get a sales force of 50 to 500 sales reps up-and-running quickly, OracleSalesOnline.com can supposedly be used by any member of a sales hierarchy to view opportunities, manage the sales process, make accurate forecasts, track sales and access customer information on a global basis.

"Companies of all sizes are quickly realizing the opportunity of leveraging enterprise-strength applications without implementation and hardware costs," said Mark Barrenechea, senior vice president, Oracle CRM products division. "With OracleSalesOnline.com, we are making it easy for companies to begin the transformation to e-business, by giving them quick and easy access to key components of Oracle E-Business Suite 11i. Businesses get instant global benefits by understanding their pipeline and forecast, and now have the ability to manage by facts. And, OracleSalesOnline.com provides the same enterprise-strength sales applications that run such enterprise sales organizations as Oracle and HP."

Market Impact

While giving a piece of software away as bait for locking potential users into buying more additional components and/or service is not new (Netscape being most widely known), Oracle may kill the following three birds with one shot: 1) it may give its archrival, Siebel Systems, some pause, 2) it could bolster its ASP part of the business (which has not achieved its expectations as yet), and 3) it might plant a seed for future sales of components of its comprehensive 11i product suite.

While we believe Oracle will achieve some success in all its endeavors from above, it is not going to cause tectonic moves among the CRM market leaders. Although Siebel took the news in its stride and shrugged it off initially, it will very likely have to come up with similar, retaliatory moves. Despite its current superior functionality and market share, Siebel will have to deal with Oracle's thrown gauntlet containing allegations that Siebel's product is lagging in its Internet deployability and that it still needs integration to a back-office. However, Oracle's moves may affect much more seriously smaller CRM players (e.g., Goldmine) or companies that currently offer similar commoditized functionality, like Salesforce.com.

While this move may help Oracle enter potential customers via their back door, it is not going to seriously jeopardize Siebel's leadership without proven rich CRM 11i functionality supposedly tightly interwoven throughout its entire 11i product suite. Early indications from early Oracle CRM adopters have shown significant improvements compared to its earlier, sub-optimal releases. This should be more disturbing news for Siebel and other pure play contenders for the CRM throne rather than a mere 'freebie' promotion.

User Recommendations

Users should certainly consider Oracle's latest offering, but avoid selecting it without looking at what the other vendors have to offer. According to an adage from ancient times "Beware of Greeks bearing gifts!" - carefully read the contract's fine print and double check what is behind Oracle's generosity. Use the existence of other alternative CRM applications to leverage the best deal. If you already have a significant investment in Oracle technology, then pursue the Oracle option. However, do not hesitate to venture elsewhere. Improvements in products interconnectivity make going beyond Oracle Applications a more viable option than in the past.

Oracle-centric and enterprises looking for commodity CRM products integrated with the ERP system may find the Oracle product very attractive. Users are also advised to consider both the maturity and the functionality of the product in their evaluations and make comparisons to competitive offerings. Future clients are also advised to request Oracle's written commitment to promised functionality, length of implementation, and seamless future upgrades, particularly for the recently released products and the products whose release dates are eminent.

On a more general note, we would strongly advise anyone considering a CRM product to define the requirement very meticulously before making any decision. Each component should be put through its paces using a well-documented set of requirements, scripted scenario demonstrations and rigorous reference checking.

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