June 14, 2006 10:56 AM PDT

Oracle signals 'no change' in CRM strategy

Oracle has unveiled its strategy to deal with the integration of its Siebel business with the customer relationship management operations of Oracle, PeopleSoft and J.D. Edwards. 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 Tuesday for customers and press in London, Oracle 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 centerpiece 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 J.D. 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 it is "the market leader in CRM, with 5 million live end users and 150 million registered self-service users." But according to analysts at Gartner, this claim does not stack up.

According to Gartner's latest figures, released on Monday, Siebel rival SAP is the market leader in CRM with 25.6 percent market share in 2005. In second place is Siebel (17 percent) and in third, Oracle, including PeopleSoft (6.4 percent).

Loic le Guisquet, head of Oracle's CRM business in Europe, said he had not seen the latest Gartner figures, but he 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). Only Oracle saw 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 organizations to opt for on-demand only, a standard software-licensing model only, or a mixture of both. More and more companies have opted 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 toward the "customer-centric enterprise," le Guisquet said.

The company has set a long timetable for the development of Oracle Fusion CRM, which is not expected to arrive before 2008.

Colin Barker of ZDNet UK reported from London.

See more CNET content tagged:
Siebel Systems Inc., CRM, Oracle Corp., PeopleSoft Inc., Gartner Inc.

 

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