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Oracle's Appetite For Big Enterprise Software Companies Not Yet Satisfied
from the keep-on-buying dept
Apparently, it's the morning of multi-billion dollar tech deals. This one has been rumored for a long, long time, but Oracle is now buying Siebel for $5.8 billion. While most are saying that Oracle has done an amazing job integrating PeopleSoft quickly and efficiently, you have to wonder if they're getting a bit cocky in their ability to merge big enterprise software companies into their own corporate structure. Also, this does seem like a big admission from Oracle that its core business is slowing down and its apps business hasn't been very successful, so they need to buy from outside to keep growing. Obviously, the plan (as it was when they tried to build their own apps) is to have apps that push for more database sales, and by taking out many of the competitive apps, they hope that Oracle comes across as the only choice. However, to some extent, it seems like they're focusing on buying the big legacy apps, and still ignoring the growing threats from below that look to completely undercut their market.
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poor analysis
Also, this does seem like a big admission from Oracle that its core business is slowing down and its apps business hasn't been very successful, so they need to buy from outside to keep growing.
Uhhh...not even close. It's just a logical step towards the declared goal of becoming the world's leading provider of business applications, and one that was being suggested and supported by both Oracle and Siebel executives for a long time.
Oracle apps are quite successful, but Siebel is the Number 1 in the CRM market, a core applications group which Oracle has been a late adopter of.
Siebel is a pure CRM provider and was putting all its resources into making their products the most successful on the market, while Oracle's Application group had to split its efforts towards many different applications. It makes perfect sense to buy out Siebel at this time when Oracle is getting ready for its Fusion release (the merged product line of Oracle, PeopleSoft and JD Edwards apps) in 2007.
Obviously, the plan (as it was when they tried to build their own apps) is to have apps that push for more database sales, and by taking out many of the competitive apps, they hope that Oracle comes across as the only choice.
This is not quite correct. Siebel apps are already built on top of Oracle databases and if anything, they would sell a few database licenses less as a direct result of the merger, because they will merge some of the applications. And unlike the PeopleSoft acquisition, the Siebel buy is not so much about eradicating a competitior as it is about actually using their technology to improve Oracle apps. There's much less overlap and Siebel products are for the most part complementing Oracle's product line, i.e. they are not a duplication of all the core products as PeopleSoft apps are.
Finally, this move really puts the pressure on SAP to come up with a plan to show people what they can offer that's better than Oracle/PeopleSoft/Siebel, so we can expect to see them making a move soon, maybe by buying out some of the smaller CRM companies, such as SF based Salesforce.
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Re: poor analysis
Quote: "so we can expect to see them making a move soon, maybe by buying out some of the smaller CRM companies, such as SF based Salesforce." Not too sure about that either. Don't forget Larry Ellison is a major shareholder in Salesforce (and NetSuite, for that matter), and there's no way he's going to let SAP or Microsoft get their hands on Salesforce, just as he's done before in preventing NetSuite from doing so (to the consternation of NetSuite's management).
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It's about time
I'm so glad to see siebel fail.
I had been there three years when they started hemmoraging people and money. They then decided to outsource most (if not all) of their software QA to India, so I moved on. Tom Siebel eventually ended up leaving the company because his "vision" only worked when the economy was booming.
It serves them right.
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