A new survey of CRM decision makers at Fortune 1000 companies found that, if approved, Oracle Corp.'s takeover of PeopleSoft Inc. could pose a formidable challenge to market leader Siebel Systems Inc.
New York-based research firm TheInfoPro Inc. (TIP) found in a recent poll that CRM users are increasingly considering integrated front and back office enterprise applications. As a result, experts at the firm feel Redwood Shores, Calif.-based Oracle's hostile bid to buy out PeopleSoft, Pleasanton, Calif., could threaten Siebel's dominance. The survey of 101 executives and project managers, at companies including Allstate Corp., Hilton International, Lockheed Martin Corp. and Volvo, focused on future CRM spending plans, budgeted technology implementations and related organizational issues.
According to David Taylor, a former Gartner Inc. analyst who is now TIP's chief research officer, the breadth of a combined Oracle-PeopleSoft, along with existing negative perceptions of Siebel, San Mateo, Calif., could shake up the CRM industry.
"Siebel obviously has a great installed base, but many customers still have less than favorable perceptions of them," Taylor said. "Many of these users remain locked into Siebel, but others are considering the alternatives."
Taylor said that most of the negativity customers reported regarding Siebel revolved around the "arrogance" of its sales force. On the software functionality side, the major issue spurring customer interest in other vendors is a desire to better integrate CRM systems with enterprise resource planning (ERP) applications, according to the report.
"A lot of companies feel you can't have standalone front-end applications like CRM separate from back-office systems," he said. "These buyers seem to agree that a combination of Oracle and PeopleSoft could offer just that kind of functionality."
Oracle and PeopleSoft are both major players in the ERP space.
Taylor recognized that enterprise software maker SAP AG also falls into this group of vendors but said that its CRM offering -- mySAP CRM -- appeals largely to its back-office installed base. Taylor also said the study found that PeopleSoft's proposed acquisition of Denver-based software maker J.D. Edwards & Co. wouldn't have much impact on the CRM market because those surveyed don't see J.D. Edwards as a major CRM provider.
Of the 101 user companies polled by TIP, 38 are currently running Siebel CRM applications. Less than 5% of those companies were specifically planning to switch from Siebel to either Oracle or PeopleSoft software in the next year. However, 19% of the Siebel users surveyed are planning ERP integration, which might cause them to consider Oracle, PeopleSoft or SAP, according to Taylor.
"The feeling remains 'we'll wait and see,'" he said.
While none of the companies surveyed in hour-long interviews with TIP would allow the company to quote them by name, the research firm did release some anonymous quotes it received permission to publicize.
The CRM director at a Fortune 1000 retailer described CRM integration hassles.
"Integrating Siebel is a very difficult effort, a very difficult proposition," said the director. "[Siebel] designed their product and strategy to have Siebel as the solution for every facet of CRM. They don't want to pursue better integration. They could be more customer focused and have more open architecture."
Siebel could not be reached for comment.
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