Oracle integrates CRM On Demand with Siebel

Its strategy is to fend off competition from Salesforce.com, analysts say

By Chris Kanaracus

August 27, 2008 (IDG News Service) Oracle Corp. announced today that it has developed prebuilt software to integrate its CRM On Demand product and its on-premises Siebel CRM system, providing customers with a single view of their CRM data.

Companies can benefit from a hybrid approach to customer relationship management because the on-demand model allows companies to more easily add new users, while enabling data from both systems to be analyzed at once, Oracle said. The integration software employs Oracle's Application Integration Architecture framework and Fusion middleware. Pricing was not disclosed.

Oracle's news release about the product stressed its benefits for customers. But the vendor's real goal is to fend off competition from Salesforce.com Inc., which has based its entire strategy on pushing the benefits of on-demand software, analysts said.

"This is how you sell against Salesforce," said analyst Bruce Richardson at AMR Research Inc. "You talk about that as a dead-end silo while selling end-to-end business processes."

"I don't think it will lead to an increase in demand for Siebel," he added.

Denis Pombriant at Beagle Research Group LLC largely echoed Richardson, while noting that Salesforce.com offers Salesforce to Salesforce, a means of integrating with fellow Salesforce.com customers, and also has strong capabilities for tying into systems such as Siebel.

"I expect this is a strategy by Oracle to keep its Siebel customers from looking outside of the barn," he said.

On the whole, Oracle has taken a cautious approach to on-demand software. During an earnings conference call in May, CEO Larry Ellison told analysts that while the company has been selling on-demand products for nearly 10 years, it only recently began making money doing so.

"The entire industry has to get better at making money selling on-demand.... That's what we're focused on before we scale the business," Ellison said at the time.

Salesforce.com's stock price dropped sharply following its recent quarterly earnings report, in which the company announced that it beat analysts' expectations for revenue but also indicated that its business is slowing down.

Reprinted with permission from

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