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Oracle-Siebel Deal Doesn’t Move Channel

Oracle’s purchase of rival business applications vendor Siebel made waves, and headlines, on Wall Street, but the merger is unlikely to have any impact on the channel, VARs and one analyst said. “Siebel doesn’t really have a product a reseller would sell,” said Jim Shepherd, vice president of research at AMR Research Inc. “Maybe down […]

Written By: John Hazard

Sep 12, 2005

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Oracle’s purchase of rival business applications vendor Siebel made waves, and headlines, on Wall Street, but the merger is unlikely to have any impact on the channel, VARs and one analyst said.

“Siebel doesn’t really have a product a reseller would sell,” said Jim Shepherd, vice president of research at AMR Research Inc.

“Maybe down the road, Oracle might find some way to offer their software as an on-demand package, but right now it is too costly and too complicated to be implemented by a reseller selling to anything but Fortune 500 companies.”

Siebel Systems Inc. develops CRM (Customer Relationship Management) software.

The company has about 4,000 application customers and 3.4 million CRM users, according to a statement released Monday by Oracle Corp. of Redwood Shores, Calif.

Siebel is only the latest in a series of purchases Oracle has made this year, including PeopleSoft, JD Edwards and Retek Inc., in an effort by the company to wrest market share from SAP AG, the leading seller of business application software.

With the purchase of Siebel, Oracle is better equipped to gain on SAP, but most VARs will be unaffected, said Jim Lewis of Business Edge Software, a storage and SRM (supplier relationship management) solution provider in Dunwoody, Ga.

Click here to read about SAP’s reseller strategy.

“Siebel isn’t a player in the SMB [small and midsize business] market, and that’s where the vast majority of VARs find themselves,” he said. “It’s a higher-tiered solution and I don’t think this deal will help do anything but [compete with SAP].”

Siebel’s product line is too expensive for all but the largest companies and the deal will not give them any cost advantage, Lewis said.

Oracle’s shopping spree should not affect Oracle’s key channel relationships, Shepherd said.

“They are still actively recruiting channel partners in their key areas—E-Business Suite and JD Edwards Enterprise One suites,” he said. “They still need channel partnerships for those areas and they’re making the necessary moves to ensure that [remains steady] through all of this.”

John Darel, CEO and founder of San Francisco-based FusionStorm, a database VAR, has provided Oracle solutions for 10 years and said he predicts little impact on Oracle’s channel.

“All of our customers, I’m sure, are using a CRM tool of some kind, and I’m sure they could use Siebel’s line,” he said. “But whether they choose that over the other options remains to be seen … It will be added to our lineup card, but we’re not making any investments until we start to see a demand for it.”

The acquisition is expected to be completed in early 2006.

Oracle-Siebel Deal Doesn’t Move Channel

John Hazard

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