CRM Competition Ain't Dead Yet

But will Oracle subsume the Siebel line, improving its own suite while conceding the standalone CRM application market to service provider Salesforce.com? Salesforce's CEO Marc Benioff thinks so. In fact, after the acquisition was announced, Benioff told his employees that the deal marks "the end of software" and that Oracle is consolidating the client-server software market, much as Computer Associates consolidated the mainframe software market years ago.

Really, Marc, be serious. First, let's remember that Salesforce.com is still selling software. Second, it's a bit early to hail the end of competition in the client-server arena. Although Microsoft may not be a big player in enterprise CRM, its very existence guarantees there'll be some competition, regardless of Oracle's disposition of Siebel.

Benioff also predicted that Oracle will kill off Siebel On Demand, a joint venture between IBM and Siebel, because it runs only on DB2 and not on the Oracle database. But the subscription-based CRM market is the one that's growing, so why would Oracle kill it? Oh, there's that little DB2 issue, but because Siebel's offering is on demand, Oracle can take its time to re-architect the software's back end and migrate to Oracle10g without bothering a single customer. In fact, it would be an opportunity to showcase the scalability and power of Oracle10g and increase market share for the platform.

Oracle's acquisition of Siebel is big news, but it isn't the end of CRM competition. Oracle has the ability to execute, and it often lulls its rivals into a sense of complacency that comes back to bite them in the end. A smart CRM vendor wouldn't lower its shield just yet.