Siebel Will Be 'Centerpiece' Of Oracle CRM Strategy After $5.85 Billion Deal - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Siebel Will Be 'Centerpiece' Of Oracle CRM Strategy After $5.85 Billion Deal

Oracle's acquisition is likely to send ripples through the application market, affecting competitors from to IBM.

Oracle on Monday disclosed plans to acquire CRM-market leader Siebel Systems Inc. for $5.85 billion, a deal that brings together two of the software industry's largest business-application providers.

The proposed deal already has been approved by Siebel's board of directors, clearing the way for what should be a smoother closing than Oracle's long battle to acquire PeopleSoft, which closed last December. "This is dramatically easier than the PeopleSoft transition," Oracle CEO Larry Ellison said in a conference call to discuss the deal.

In the same way that Oracle was attracted to PeopleSoft for the large installed base of companies using PeopleSoft's human-resources applications, it's Siebel's base of 4,000 customer-relationship-management accounts and 3.4 million user licenses that are driving Oracle's bid this time. The CRM market is expected to grow to $10 billion by 2009, according to research firm IDC. Oracle and Siebel are responding in part to the rapid growth of competitor and its hosted applications model.

If the deal goes through, Oracle will end up with three different CRM suites in its product portfolio. Oracle already sells and is continuing to develop its own CRM applications in an applications project called Fusion that's under way. In addition, the company continues to sell and support CRM applications formerly marketed by PeopleSoft.

Ellison said Siebel's CRM suite will become the "centerpiece" of Oracle's CRM strategy going forward. Oracle will invest heavily in continuing to move all of the features of Siebel's CRM suite to Siebel's smaller but strategically important on-demand offering.

Ellison disagreed with a questioner who suggested that some significant share of Siebel's customers are unhappy with their Siebel software. "They're certainly not complaining to us" about Siebel's software, Ellison said.

Siebel chairman Tom Siebel has given his blessing to the acquisition, pledging to vote his share in its favor. "What really brought this together was a shift in market dynamics," Siebel said. Businesses are no longer interested in buying best-of-breed applications and now want integrated suites from a single vendor, he said.

Oracle has been on an acquisition binge for the past year. Oracle and PeopleSoft signed a $10.3 billion merger agreement last December, capping a contentious 18-month takeover. Since then, Oracle has acquired or disclosed plans to acquire Context Media, i-flex, Oblix, ProfitLogic, Retek, TimesTen, and TripleHop.

The deal also means that IBM could be feeling increasingly boxed in by Oracle, which is making a habit of acquiring key IBM application partners. Last year it was PeopleSoft, with whom IBM had a number of development, service, and marketing deals. Now, it's Siebel. IBM offers Siebel's CRM software on a hosted basis through its Global Services arm. It also has teamed with the ISV on government projects and a number of big services engagements.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

New Storage Trends Promise to Help Enterprises Handle a Data Avalanche
John Edwards, Technology Journalist & Author,  4/1/2021
11 Things IT Professionals Wish They Knew Earlier in Their Careers
Lisa Morgan, Freelance Writer,  4/6/2021
How to Submit a Column to InformationWeek
InformationWeek Staff 4/9/2021
Register for InformationWeek Newsletters
Current Issue
Successful Strategies for Digital Transformation
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll