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The Siebel-Oracle Match

A few observations about the planned Oracle acquisition of Siebel:

-- Some customers are going to be angry because things will be different and they won't like it, whatever those changes may be and whatever the reasoning behind the changes. Siebel and Oracle have vastly different corporate cultures and varying approaches to issues including support and customer service. Customers who like one vendor's philosophy won't necessarily appreciate the other's. And guess whose approach will win out, ultimately, even if it takes a while? Bingo. To the victor go the spoils, as Dad and Machiavelli always used to say.

-- A subset of these unhappy customers will go and find other CRM vendors in hopes their new software providers won't be acquired also. Other unhappy customers will stick with the newly glued-together companies mostly because they don't want to have this particular conversation with their CEOs. (See the next item.) These customers will frequent Oracle user meetings and complain loudly.

-- Some customers are going to be relieved. Seibel's been on a slippery slope financially, with three CEOs in two years and an inability to grow market share. These customers might not be thrilled at all the changes afoot, but they will be happy their CRM investment is safe and that it lives on in some form. And, most important, they'll be even happier that they don't have to explain to their CEOs why they need to pull the plug on their CRM package right now. These folks might even help Oracle develop the Seibel product line in such a way that they'll stick around long-term, if the vendor plays its cards right, actively solicits user feedback, and actually implements some of the suggestions. In any event, Oracle is hoping these happy customers outnumber the unhappy ones described above.

--It will take at least twice as long for Oracle and Siebel to integrate whatever they promise they're going to. Okay, maybe not twice as long--but much longer than they say. It always takes longer than vendors think or are willing to admit. Particularly in this case, where Siebel is one of three--count 'em--CRM packages now in the Oracle arsenal. Yes, Oracle CEO Larry Ellison has said that Siebel will be the "centerpiece" of the company's CRM strategy going forward--but what does that mean, exactly? That Oracle is going to ditch development of its own internally written package? Or that it's going to ignore the CRM software it won in its 18-month-long battle to acquire PeopleSoft? I doubt this; if Oracle even breathes a hint of dropping the PeopleSoft package, investors will be lining up to challenge Ellison to pistols at dawn.

-- Another company lost out because of an inability to react quickly enough to change. Some readers will remember the late, great minicomputer vendors (Wang Labs, DEC, Prime, and so on). All of these dearly departed were, at one time, at the top of their game but then dropped the ball--Wang, for one, didn't think the PC was going to matter very much and so insisted on ignoring the phenomenon until it was too late. In Siebel's case, whippersnapper Salesforce.com and perennial application-software force SAP have won customer accounts at Seibel's expense. On-demand CRM, via the Internet, is one of the largest market forces these days, and Siebel just hasn't been a major player in this game. (The latest version of Siebel's on-demand offering was announced the same day as the deal with Oracle.) Hosted CRM (which used to be called 'timesharing,' by the way) is another up-and-comer that Siebel didn't compete in.

-- All of the CRM competitors, including the ones that have been winning of late, might be in for a rude shock if Indian software companies have their way. Sharebuilder, an online brokerage, recently purchased its CRM software from Talisma, a Bangalore provider.

It's not too late, of course; Seibel's being acquired--assuming its shareholders agree--but it's not dead. There are many possibilities ahead, but the exact nature of the next play is up to committed customers and to the Oracle establishment.

If I recall correctly, Larry Ellison has been a fairly competitive tennis player through the years. I hope he keeps an eye on this particular ball, because it has the potential of dropping very quickly if he doesn't. If that happens, customers will be biggest losers of all.

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