IT companies react to Oracle's Siebel buy-out

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By: Wise Marketer Staff |

Posted on September 15, 2005

IT companies react to Oracle's Siebel buy-out

Information technology players have begun the expected backlash following the news that Oracle proposes to acquire Siebel Systems in a bid to improve its position in the CRM and ERP marketplaces.

One of the first independent players to react was Info-Tech Research Group, the operator of a web-based IT news and research portal. According to Janet White, an analyst with Info-Tech, Oracle's proposed acquisition of Siebel Systems may better position the company to compete with major players such as SAP, but the sheer size of the combined organisation may also reduce its ability to innovate and compete with smaller, nimbler CRM vendors.

White agrees that there's an advantage in it for Oracle, but remains concerned: "By purchasing Siebel, Oracle has acquired an additional 3.4 million CRM users and the maintenance fees that go with that kind of installed base. However, where Oracle may be able to compete with SAP on numbers in the short term, they may have trouble competing longer term on product innovation.

Legacy concerns While Info-Tech's view is that Oracle is first and foremost an applications company, and that it makes sense to move acquired customers over to its existing technology, White asks: "How much time will Oracle really have to integrate its existing portfolio, or create innovative new products, when it will have to spend so much time maintaining disparate systems coming from its recent acquisitions of PeopleSoft, JD Edwards and Siebel?"

But Oracle may also be surprised at how the mid-market reacts to this latest acquisition announcement. White points out that it would be relatively easy for users to move to a less complex CRM system. "CRM products from vendors such as and RightNow Technologies are fairly easy to get up and running. Mid-market enterprises may decide to make the shift from Siebel On-Demand to one of these companies, rather than do business with Oracle," White warned.

Adaptability Although the opinion of CRM provider Onyx Software Corporation has a degree of vest interest built in, Onyx's CEO, Janice P. Anderson, reacted similarly: "Oracle's acquisition of Siebel seems to be based on the premise that customers want fewer choices. But we're finding just the opposite."

Anderson added, "Many enterprise customers are looking to increase business value with solutions that easily leverage their existing IT environments. But mega-vendors tend to integrate within their own product suites and not with the diversity of legacy processes and systems that companies already have to deal with."

For additional information: ·  Visit Info-Tech at ·  Visit Onyx Software at ·  Visit Oracle at ·  Visit Siebel at