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Oracle-Siebel: The competition reacts

Today's announcement that Oracle will purchase Siebel Systems for $5.85 billion brought swift reaction from its CRM competition.

Today's news that Oracle Corp. is purchasing Siebel Systems Inc. for $5.85 billion brought a swift reaction from competitors in the CRM market, particularly from hosted CRM vendors.

During Oracle's antitrust trial last year, Oracle CEO Larry Ellison revealed that Siebel had been a potential acquisition target, fueling speculation that once PeopleSoft was out of the way the company would make a move on Siebel. It happened today and the competition was ready with a response.

  • "Oracle put Siebel investors out of their misery today. We have been doing that for Siebel customers for years. Client/Server software is being consolidated by Oracle just as mainframe software was consolidated by Computer Associates. Oracle's strategy is simple. Instead of innovating, buy as much installed software as possible, call it all Oracle Fusion, and make sure it all uses Oracle's database. Now, the same thing that happened to PeopleSoft will happen to Siebel, it will die. Customers will look for new solutions and new providers. Employees will look for new employers. Siebel OnDemand, a joint venture between Siebel and IBM, will be the first to be buried. Now, the opportunity to be the global leader in the CRM market has opened for Our dream is becoming a reality as the world will move to new on demand solutions. Already the fastest growing public CRM company in the world, with over 50% market share in on-demand CRM, is well poised to become the world's new global CRM leader." --Marc Benioff CEO of in a statement to employees

  • "Consolidation may well be the only way for the 'old guard' of enterprise software to grab market share since software purchasing clearly continues to shift to on-demand vendors. Siebel tried to make the transition to on demand, but were late to the party. These old guard application vendors including Siebel, Oracle and SAP have struggled with customer satisfaction and I don't see how this move will help solve this problem." -- Greg Gianforte CEO of RightNow Technologies

  • "Oracle's acquisition of Siebel seems to be based on the premise that customers want fewer choices, rather than more. We're finding just the opposite. Many enterprise customers are looking to increase business value with solutions that easily leverage their existing IT environments. Mega-vendors tend to integrate within their own product suites and not with the diversity of processes and systems that customers have to deal with today. Many customers don't want to buy another massive solution suite in order to advance their business goals. In general, we believe enterprises prefer flexible solutions that enable business agility in the face of dynamic market conditions as well as integrate existing investments quickly and cost-effectively." --Janice Anderson, CEO of Onyx

  • "It's clear that Larry wants to own the market for ERP and CRM with investments he's made in and NetSuite and Oracle's purchase of PeopleSoft and now Siebel. But from a product point of view, we do not see this affecting Salesnet or the other pure-play on-demand vendors a great deal - it's really more of an offensive against Microsoft and SAP. The acquisition of Siebel may have bought them the No. one slot in the CRM world, but it did not buy them a very strong nor mature on-demand CRM product, which leaves them still behind the other on-demand vendors, such as Salesnet, which have built strong on-demand applications from the ground up." -- Jonathan Tang, president and co-founder of Salesnet Inc.

  • "With the acquisition of Siebel, Oracle is truly becoming a main player in the CRM market. In reality, many organizations we work with already have Siebel, Oracle or both installed. However, to make true improvements to the customer experience, companies will still need to layer applications like KANA on top. The acquisition of Siebel by Oracle means that the two companies will be focused on integration for at least the next year, and less so on creating new technology-- which opens even more opportunity, and decreases competition for KANA." -- Brian Kelly, executive vice president of corporate strategy for KANA Software Inc.

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