<mr71, as a sebl ex, you really view oracle as a competitive threat? Do you expect them to do as well as they did in the erp market? Are you talking about oracle as a threat from a product standpoint or overall?>
David, Tom views the CRM market as a market-share game. Technology is not as important as distribution partnerships (of which Andersen was the most important, now replaced by IBM) and pure business execution. And I agree with Tom on this one. Siebel did not and does not have the best technology in the space, but it is viewed as the vendor of choice by the marketplace.
The problem is that with Oracle, a client could theoretically buy the database, the apps (ERP, CRM, and supply chain), and the services (consulting, trng, etc) from one source - one vendor, one noose. The only thing a client would have to buy outside ORCL is the HW, which it would likely buy from Sun. This is Oracle's advantage. Fortunately, they have simply been unable to execute this strategy. From what I have seen, the CRM product isn't very good. The last version I saw was still based on Oracle Forms - and that ain't gonna play in Peoria. And no matter what they tell you, there is little or no integration btwn erp, crm, and scm.
But if Oracle can ever really execute this vision, where an order could come in through any channel using Oracle CRM, and the appropriate updates could be made in Financials and their supply chain SW, then you are looking at a wholly integrated enterprise, starting with CRM, moving to ERP and SCM, all running on an ORCL dbms engine.
Do I think this will ever happen? No, not completely, but Oracle will definitely carve out some market share. Will they dominate? I doubt it, but I worry that they could grab enough to hurt Siebel just because they are so damn big.
Of course, Tom is no dummy, he knows all this much better than anyone. That's why the IBM partnership is such a huge win/win. They get to sell their servers, Websphere, and services, and we get the apps business all to ourselves. Advantage: none (would be Oracle if they could execute).
<Is it really possible for oracle to undo the damage they did to the SI channel? (If they manage to start undoing the damage, my guess is it would take 5 or so years from now to completely repair....but as an SI with a monsterous SEBL practice why bother with building out a redundant practice?)>
I doubt it, but I honestly don't know. The one constant in Oracle's messy relationships with the SIs (and everyone else) is Larry's ego, which we can count on to get even bigger now that he's got himself the AmericaOne yacht! Seriously, as long as Larry is running ORCL, they're going to have a credibility problem with SIs. Advantage: SEBL.
<Are you aware of any single large scale Oracle CRM deployment that's running? My problem with Larry and all of his outright Clintons about the CRM and Supply Chain markets is that you will never know the truth without talking to customers. I'm looking, but I can't find them.>
That depends on your definitions of "Oracle", "CRM", and "deployment". Also, "customers". Using Ellison's Clintonian definitions, I am sure Oracle thinks it's bigger than Siebel already. Aren't they growing at 140% per year in CRM? Amazing that they can be that big and no one can find an ORCL CRM customer anywhere on the planet. Advantage: SEBL - huge advantage.
<To be safe with an investment at these valuations it is only rational to plan for some valuation compression.>
In my spreadsheets, I have planned for steady compression, but with healthy earnings growth. In my view, earnings will outgrow valuation compression, leading me to project that Siebel could achieve a $100B market cap by 2003 (assuming no earnings miss. But if Siebel misses in the next 8-12 quarters, I'll eat all the silicon in the silicon valley). |
