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Data Business - The market view: Wanted - a leader for the CRM market.
(Computing)One does not need to be a financial analyst to notice that Oracle has been feeling quite acquisitive of late.
And after a reporter pointed out that Siebel chief executive George Shaheen's incentive package included a substantial bonus following the sale of the company, Oracle's acquisition of one of its most bitter and outspoken rivals was inevitable.
It is far too soon to tell if Oracle's friendly takeover of Siebel will be good or bad for Siebel's many users, but Oracle's habit of blotting out the sun means customer relationship management (CRM) may need new leadership, soon.
Siebel's star has been waning for some time, and its ability to lead was seriously in question. When its speciality, the large enterprise market, dried up, Siebel moved downmarket and the product spread into numerous pre-packaged vertical specialties for the mid-market, while preserving much of the complexity and power of the original product.
However, the market was unimpressed, and firms such as Salesforce.com and NetSuite have thrived by delivering a subset of that functionality, but as an easy-to-digest online-hosted package.
Siebel tried to jump into this market with the purchase of UpShot CRM - later repackaged as Siebel OnDemand - but the first movers had an unassailable head start and established products. Still, Siebel was once the recognised leader for good reason.
Last year I worked as editor of US-based CRM Magazine. While compiling the magazine's annual vendor awards, I noticed that the scoring gap between perennial leader Siebel and its enterprise CRM competitors was razor-thin.
I joked with my colleagues at the time that I did not want to have to be responsible for that inevitable day when the magazine would have to declare that Siebel was no longer the category captain. My prediction came true - CRM Magazine in its 2005 CRM Leader Awards, committed to print even before the Oracle deal was unveiled, cast Siebel as bridesmaid.
I believe Oracle's purchase will do nothing to reverse that fall in status. With Siebel no longer setting the tone for CRM, there will be a leadership vacuum.
For better or worse, Siebel has defined what CRM is all about for the better part of a decade. Rivals such as Salesforce.com and NetSuite may have been almost diametrically opposed in their approach to design and implementation, but the key is that they were opposed to Siebel, because Siebel set the pace for the technology.
Of course, Oracle is no stranger to defining markets. Arguably, its enterprise database product is the industry's gold standard, and it continually races with SAP to set the pace in enterprise resource planning. Yet Oracle has tried and repeatedly failed to establish itself as a true CRM market leader. Its core CRM offerings are often viewed as gateway products to the larger Oracle technology suite, and Oracle has had even more trouble than Siebel defining a mid-market CRM strategy and sticking to it.
For Siebel's part, the firm is at least putting up a good front of not going quietly into a Larry Ellison-induced retirement a la PeopleSoft.
Since the acquisition was announced, Siebel has been aggressively denying the doomsday scenarios painted by the firm's gleeful competitors. But the firm's glory days appear to be gone, and there is no clear successor to take up the baton.
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