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Gartner analysts predict Oracle CRM moves

Plenty of Siebel users are still concerned and confused over the direction of their CRM tool. Analysts at the Gartner CRM Summit offered some clues.

CHICAGO -- Despite repeated assurances by Oracle Corp. executives that Siebel will remain the centerpiece of the company's CRM applications as it moves forward with Fusion, questions -- and concerns -- linger in the Siebel customer base.

"Those of us familiar with Oracle CRM know what a terrible product that was -- they were basically giving it away," Christopher Keith, manager U.S. sales and marketing solutions at ZLB Behring, a Pennsylvania-based pharmaceutical company, said during a session at the Gartner CRM Summit being held here this week. "I'm concerned they're throwing the baby out with the bathwater."

The acquisition of Siebel was made in order to acquire functionality and CRM expertise, not just customers, Oracle executives insist.

"We're not throwing anything out," said Mark Wollen, an Oracle executive attending the Summit. "I'm cognizant that's a valid concern. We all are, knowing how acquisitions can be in enterprise software. But this is not a CA strategy. We're not in this to milk maintenance revenues." @25742

Yet CRM functionality is not the only concern and question for Siebel users trying to sort through Oracle's plans as it brings Siebel together with its PeopleSoft, JD Edwards and Retek acquisitions.

"In the Siebel user base, about 10% are saying, 'That's it, I'm leaving,' 5% are excited about Fusion and the rest are sitting on their hands," Gartner analyst Ed Thompson said yesterday at a breakfast session covering Oracle's CRM architecture.

Siebel upgrades remain a major concern for customers who still need to move from version 6 to 7, eventually upgrading to Siebel 8.0, and finally to Oracle Fusion CRM -- any of which could prove to be a painful process. Point release upgrades cost about 5% to 15% of the cost of the initial upgrades, Thompson said. Customers who have extensively customized their Siebel application could face expensive transition costs when Oracle moves Siebel to the combined Fusion product.

"It can really be expensive," said Michael Maoz, an analyst at Gartner. "You could be looking at 60% to 80% of the original investment before you get to Fusion."

Ed Abbo, senior vice president of CRM products at Oracle, attended the session as well. While Oracle is designing Fusion to make it a smooth transition, he urged customers to minimize outside code or to express it as a Web service.

Oracle can probably expect its customers to wait a while before any move to Fusion. @25731

"We've customized [Siebel] to a T," said Keith, whose company is currently on Siebel version 6 and is considering an upgrade to 7. "My concern is, we have to go with a business services implementation and that can get expensive. Our approach to how we design has shifted. Five years from now, are we looking at re-platforming?"

Thompson and fellow analysts Michael Maoz and John Radcliffe offered some predictions of Oracle's product direction to help customers sort through the move toward Fusion.

According to Gartner:

  • By 2010, 80% of Fusion CRM will be based on Siebel;
  • Through 2011, Siebel 7.8.x, 8.x business logic will not run natively on Oracle Application Server;
  • By year-end 2006, Oracle will certify Siebel CRM 8.0 applications to run in a Fusion Middleware environment;
  • Through 2011, Fusion CRM applications will run in the Fusion Middleware environment;
  • Through 2011, Fusion CRM applications will be optimized for Oracle RBDMS; and
  • It will be 2010 before a fully verticalized CRM application suite is available.

    In addition, Oracle will leverage Siebel's component assembly architecture, code-named Nexus, into Fusion Middleware. It's not a move away from WebSphere or .NET, but customers in those environments should expect a lag time as Oracle concentrates first on Fusion middleware, according to Gartner.

    "With Nexus and Siebel Component Assembly, Siebel was in effect giving up the application server," Thompson said. "[Versions] 7.8 and 8.1 will keep using Siebel but also will support J2EE."

    Both Oracle and Siebel had launched Customer Data Integration (CDI) tools, Oracle Customer Data Hub (CDH), and Siebel's Universal Customer Master (UCM). They will continue to be sold separately -- CDH into business-to-business and smaller organizations and UCM into higher-end and business-to-consumer businesses, eventually converging into one product beginning in 2008.

    Siebel customers not running an Oracle database can also expect a few phone calls in the coming years.

    "Oracle really doesn't like building applications," said Maoz. "That's why they bought them. In some ways you can look at Oracle applications like the gateway drug to Oracle middleware and databases."

    Added Thompson: "You with the DB2 can expect an Oracle rep knocking on your door repeatedly. Over time, the pressure will rise to buy an Oracle database. You can get away with it for three to five years."

    Keith, who runs Oracle databases and SAP in the back office, is getting plenty of pressure from SAP to switch as well. ZLB Behring just launched SAP's Internet Sales, part of its CRM package.

    Oracle will provide more details on architecture and support at its upcoming OpenWorld conference.

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