Of all the mistakes that Siebel made - and there were unfortunately quite a few - perhaps the most unnecessary was allowing Salesforce.com to get under the corporate skin. Siebel went from being the market leader to being reactive towards an 'enfant terrible' with a new business model. Partly this was down to Siebel; partly it was due to great marketing from Salesforce.com itself. Whatever the reason, when Siebel CRM OnDemand came along, it looked like a response to Salesforce.com rather than a strategic move in its own right.
You might expect that Salesforce.com would be among those most ready to claim that Siebel CRM OnDemand will be a victim of the merger, but in fact EMEA president Steve Garnett reckons its status might at least partially protect it. "I can understand why they’re saying that OnDemand is going to carry on," he argues. It’s about the only glimmer of hope in the Siebel portfolio. It would be ludicrous to talk about killing off the one area of the business that is growing. Now that said, whether people are going to buy into this is another matter and whether Oracle really buys into it is another matter. Siebel CRM OnDemand is built on IBM technology.
"But there's more to it than that. For the past ten years Oracle has said that you need to have one integrated set of applications written on one code base by one engineer. Even if you go back to just before the PeopleSoft acquisition, that was what they said. So, if, as a customer, you followed Oracle’s advice for the past ten years, do you now just accept that they didn’t really mean it?
"Oracle now has 7 CRM products in its portfolio, it has to rationalise that. Its challenge is going to be to make sure that Siebel customers don’t flee and run off to buy other software. History tells us that if customers buy into a product and then have to migrate off of it, it hurts and it’s costly. But it’s confusing for Siebel customers at the moment and Oracle needs to make sure they don’t defect."
Salesforce.com is the company perhaps most publicly identified with the on demand applications movement. Garnett notes with evident satisfaction that former sceptics have come on board as well. "Critics said it was only for small businesses and we showed them they were wrong," he says. "They said that once it was in with larger firms that it couldn't be customised and we showed them that was wrong. Then they said it couldn’t be integrated and we knocked that one on the head.
"Customers need to be careful though about what is being sold as hosted. There are companies that have a half-baked version. They sell you software and then they host it. We are built for the internet. We have a single, integrated multi-tenanted architecture. If you just outsource your application to someone else to run, then you're just getting someone else to run your mess for you.
"But the on premises market is stagnant. We can see that in the consumer market and now we can see it moving over to the business market. It is changing. Everyone on the planet knows how to use Yahoo and Google - you don’t need to go on training courses to use them - so why do we not have business applications that are as easy to use as Amazon.com? If business apps were are easy to use as Google, then it would be a huge leap forward. But the likes of SAP, Oracle and Microsoft can’t allow that to happen too quickly."
By Stuart Lauchlan
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