Oracle's spree changes CRM landscape

In the beginning, customers won't see any major changes as a result of Oracle's decision to buy Siebel Systems last week . Most of the short-term benefits will be reaped by Oracle over the next calendar and fiscal years, as Siebel's software licenses, maintenance contracts and consulting fees fatten Oracle's revenue and profit results.

But in the long term, corporate executives will have to assess how successful Oracle is with Project Fusion , the company's ambitious new architecture designed to create a common foundation for its applications, including four separate CRM offerings: Oracle's own; PeopleSoft, which Oracle acquired in January; JD Edwards, which PeopleSoft bought while it tried to fight off Oracle's hostile takeover; and now, Siebel.

Siebel markets a suite of CRM applications, including versions tailored for several vertical industries, such as manufacturing and distribution, telecom, life sciences, financial services and public sector. Its list of top customers reads like a who's who of high tech: IBM, HP, Microsoft, Cisco and Sun, as well as Deutsche Telecom, General Motors and Bank of America.

To continue reading, register here and become an Insider. You'll get free access to premium content from CIO, Computerworld, CSO, InfoWorld, and Network World. See more Insider content or sign in.

In the beginning, customers won't see any major changes as a result of Oracle's decision to buy Siebel Systems last week . Most of the short-term benefits will be reaped by Oracle over the next calendar and fiscal years, as Siebel's software licenses, maintenance contracts and consulting fees fatten Oracle's revenue and profit results.

But in the long term, corporate executives will have to assess how successful Oracle is with Project Fusion , the company's ambitious new architecture designed to create a common foundation for its applications, including four separate CRM offerings: Oracle's own; PeopleSoft, which Oracle acquired in January; JD Edwards, which PeopleSoft bought while it tried to fight off Oracle's hostile takeover; and now, Siebel.

Siebel markets a suite of CRM applications, including versions tailored for several vertical industries, such as manufacturing and distribution, telecom, life sciences, financial services and public sector. Its list of top customers reads like a who's who of high tech: IBM, HP, Microsoft, Cisco and Sun, as well as Deutsche Telecom, General Motors and Bank of America.

Oracle's first goal will be to take care of the flood of new customers using software developed by someone else. "In the short-term, Oracle is working very hard to maintain customer satisfaction and minimize concerns about support," says Stuart Williams, an analyst who focuses on enterprise applications for Technology Business Research.

So far it seems to be working.

"We're a fairly substantial JD Edwards customer, and we haven't seen any negative impact with respect to that," says Stephen Pickett, vice president and CIO of Penske, a transportation services company in Bloomfield, Mich. "We are running Siebel at one of our subsidiaries. It's good to hear that Siebel now has a deep pocket, which it didn't have before and I think it would continue [software] development. More and more of our software is running on Oracle, and so far they've been a viable partner."

But this continuity hides the fact that Oracle is in the midst of a market-shifting transformation. "Oracle has taken a huge lead in the CRM marketplace," Williams says. "They've completed their transformation from being just a database company to being a company with database, middleware and applications."

This is the core software stack that big corporations rely on to run their businesses. Increasingly, these corporations want these applications built on a consistent framework, says Peter Kelly, senior analyst with Burton Group, an IT research firm.

That's what Oracle is attempting to do with Project Fusion - a grand scheme to devise a new framework for all its applications. These next-generation applications will be based on a service-oriented architecture (SOA ), Web services and XML.

Project Fusion is intended to create a common data model and application architecture to let CRM and other enterprise applications, such as supply-chain management, procurement and financials, all work together smoothly.