Can Oracle cement its range with Siebel?

Could cause concerns for both sets of customers

Experts have predicted that Oracle's plan to purchase customer relationship management (CRM) firm Siebel will cause concerns for both sets of customers, and could derail Oracle's Project Fusion strategy.

Announcing the deal Oracle chief Larry Ellison promised support for Siebel's existing products for some time to come. He added that the Siebel CRM suite will be the centerpiece of Oracle's CRM strategy and of Project Fusion, a combined set of applications already set to include functionality from Oracle, PeopleSoft and JD Edwards products.

Paul Hamerman of analyst firm Forrester said customers on both sides were likely to have concerns. "The biggest source of apprehension will be how this folds into Oracle's next-generation strategy and will it prove an expensive upgrade five to seven years down the road?" He added that existing Oracle, PeopleSoft and JD Edwards customers will view the deal as bringing " more change and complication around the next-generation strategy."

The deal, valued at around $5.85bn, is expected to close early next year. Hamerman anticipated no hold-ups in regulatory approval. "I think the US government learnt a hard lesson [by opposing Oracle's] PeopleSoft takeover. It will be subject to a normal review process but they will let it happen."

Hamerman advised Siebel customers to stay on recent releases of products to keep their options open regarding migration. "And watch Project Fusion developments," he added.

Ronan Miles, chairman of the UK Oracle User Group, said Siebel brings a lot of capabilities in CRM. "But the downside is that Siebel's exploitation of Oracle technology is not all that Oracle owners would wish," he said.

Miles cited Oracle's partitioning as an example. "Siebel users could benefit from partitioning but the instant they turn it on, officially they lose support from Siebel," he said.

Miles also voiced doubts over Project Fusion in light of the deal. " Combining two things is twice as hard, three things is four times as hard and four things makes it eight times as hard."