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Oracle-Siebel deal shakes up CDI world

Which will win out in the contest between Siebel's Universal Customer Master and Oracle's Customer Data Hub?

With the impending acquisition of Siebel Systems Inc., Oracle Corp. will have some hard choices to make. Once finalized, the deal will make the Redwood Shores, Calif.-based company the biggest CRM vendor, but it will also cause a customer data integration (CDI) dilemma.

As the market for CDI technology has heated up (the market grew 135% from 2003 to 2004,  according to one report), both Oracle and San Mateo, Calif.-based Siebel jumped in with competing products, the Customer Data Hub and Universal Customer Master (UCM), respectively.

"They've got an embarrassment of riches now," said John Radcliffe, research vice president with Stamford, Conn.-based Gartner Inc. "They need to have some serious discussions and work out what will be the strategic product going forward. If you follow the logic that Siebel CRM is the 'centerpiece' of Oracle CRM going forward, that means Oracle and PeopleSoft CRM take a back seat. That means the data model, relative to Oracle CRM, takes a back seat and the Customer Data Hub takes a back seat."

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Consequently, customers about to embark on a Customer Data Hub project should probably hold off on any implementations until they have a clearer signal from Oracle or Siebel on the future of the product.

"If you're about to make a big, expensive decision, I would wait," Radcliffe said. "Push Oracle or Siebel pretty hard on this. You do not want to make a decision that is suddenly going to be out of date within a few months. We advise people to get contracts that protect them from that sort of thing. For people who've already committed and are live or well into implementation I would say continue, particularly if you're live. You can't switch it off."

Aaron Zornes, chief research officer with the CDI Institute in Burlingame, Calif., agrees that Siebel's UCM will likely be the CDI standard for the merged Oracle-PeopleSoft-Siebel enterprise applications in the future, while Oracle's Customer Data Hub will be the data hub of choice for small and midsized businesses standardizing on Oracle's e-business applications. Additionally, Zornes notes that Oracle benefits from the deal by acquiring Siebel's service-oriented architecture (SOA) with the UCM and Universal Application Network that it needs to deliver on Fusion middleware.

"The new race Oracle and SAP are engaged in is about who can bring to market faster 'business services' for both the midmarket and large enterprises -- i.e., application components/services based on the 'open' service-oriented architecture," Zornes wrote in an alert issued after Oracle broke the news of the acquisition. "At the end of the day, the upcoming vendor battle is about who owns the customer record, given that everyone is moving to SOA and Web services/components based on open source."

Ultimately, the question of which CDI technology wins out may depend on how many and which Siebel executives keep their jobs after the Oracle buyout, Radcliffe said.

"If enough senior Siebel people come across and form a strong group and win some decisions, you could easily see it's the ex-Siebel people really calling the shots and UCM becoming the main customer hub," Radcliffe said. "If the main Siebel people do not come over, the politics are going to dictate if they stick with Oracle's. A lot will depend on people and the clout they have once they're in the Oracle organization, and that's difficult to gauge right now."

Beyond the long-term decision of which data model will win out for Project Fusion, Oracle has a short-term decision to make on which data hub to tie together the PeopleSoft, J.D. Edwards, Siebel and Oracle applications within  Fusion Middleware.

Additionally, Oracle faces another integration dilemma with customer data. Data quality and data integration tools, like extract transform and load technology, are vital to successful CRM projects, and Oracle will need to make some choices about partnerships and development.

"Siebel has been an [OEM] partner of Informatica, but Oracle has a competitive tool in Oracle Warehouse Builder," said Ted Friedman, research vice president with Gartner. "Oracle needs to determine whether it will partner with Informatica or go internal. In terms of functionality, Informatica is broader and deeper, though Oracle is making good strides with Warehouse Builder."

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