SAP Extends 'Safe Passage' to Siebel Houses

By John Hazard  |  Posted 2005-10-20 Email Print this article Print
 
 
 
 
 
 
 

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Updated: SAP is after Siebel market share with its Safe Passage program, but it is more likely to come through market momentum than the passage, partners and analysts said.

SAP AG Inc., this week extended its Safe Passage program to Siebel Systems Inc. customers, offering them a chance to switch CRM platforms to mySAP CRM with discounted migration costs and support.

But the program to sneak customers away from Siebel and its soon-to-be parent company, Oracle, is unlikely to be effective, said resellers and business analysts.

The program, announced on the very day Siebel users gathered in Boston for their annual conference, is intended to capitalize on the fear and uncertainty Siebel's customers may be facing since it was announced in September the company was to be Oracle's next acquisition, said Cathryn Rheiner, SAP's vice president of CRM industry solutions group, SAP America Inc.

SAP, of Waldorf, Germany, the market leader in business applications, has been battling with Oracle since the latter embarked on a buying spree about a year ago. In addition to Siebel, the company purchased Retek, PeopleSoft Inc. and JD Edwards, which made it competitive with SAP in the CRM space.

Oracle has outlined Project Fusion, a code name for a suite of products that it said will merge the best aspects of Oracle, Siebel, PeopleSoft and JD Edwards. SAP's first two rounds of Safe Passage offered customers of those companies the same option (the first aimed at Oracle, the second at PeopleSoft and JD Edwards users).

Click here to read channel reaction to Oracle's Siebel purchase.

But the future of the Siebel line, which is slated to transfer to Oracle ownership in early 2006, is still uncertain, and this program is oriented toward Siebel customers who are faced with the question "what do we do with a solution that it is not going forward," Rheiner said.

Safe Passage offers customers conversion tools, a value engineering assessment that outlines the costs and benefits, and a 75 percent credit on Siebel investments to be used on the purchase of SAP infrastructure.

Oracle resellers and business analysts, however, said Oracle is moving forward and the cost of migrating to an SAP platform outweigh any benefits.

"They tried the same thing before and it didn't have much impact," said Paul Warren, vice president of marketing and sales at Back Bay Technologies, of Boston, a PeopleSoft and Oracle solution provider. "It's just too costly and too much risk to consider leaving something you have put so much money into. They're trying to use the F.U.D. principle—fear, uncertainty and doubt—to convince people to jump ship, and they will get a handful here and there, but on the whole most people will not see a compelling reason to switch."

Oracle didn't consider SAP's approach much of a threat, said Bob Wynne, vice president of corporate communications at Oracle.

"Oracle's proposed acquisition of Siebel is a reflection of customer demand," he said in a statement released this evening. "We don't see SAP's marketing program as a real option for Siebel customers."

Oracle has made progress convincing customers that the transition to Fusion will be a smooth one, said William Band, a CRM analyst at Forrester Research, of Cambridge, Mass., an IT business research firm and that should mitigate much of the migration.

Click here to read why The Channel Insider columnist Elliot Markowitz thinks Oracle's purchase of Siebel is a boost to SAP.

The first two rounds of Safe Passage resulted in 29 migrations to SAP, according to SAP's own statistics, out of an estimated 16,000 Oracle customers. Band expects this third round to net even fewer of Siebel's estimated 4,000 customers.

Philip Haine, president of MSGi, Inc., of Eagan, Minn., a midsize business consultant, who sells both SAP and Siebel, said the effort is likely to achieve an unspoken goal – positive market momentum for SAP.

"There are people who don't like Oracle and many of those were Siebel customers," he said. "When they picked these product lines, many times, one of the components of their decision was that they didn't want to work with oracle, not all of a sudden they are. So there will be organizations, who, because it's Oracle, just won't want to be there.

"What SAP gains from this," he said, "is the known visibility of the option to switch to a stable environment."

The target, Band said, is not current Oracle and Siebel client's, but customers on the margins of the market.

"This isn't about picking up market share, it's about marketing and keeping the pressure on Oracle, and it's a good plan," Band said. "They'll pick a handful of customers here and there like they did the first round. But the real gain is in the market momentum it could give them. They will get it in people's heads that maybe there is a reason to avoid Oracle and Siebel, and that's what they will do."

Siebel did not respond to requests for comment by the time this story was published.

 
 
 
 
 
 
 
 
 
























 
 
 
 
 
 

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