Siebel users willing to wait for Oracle plan

Several users interviewed this week said they are expecting benefits from the combination of Oracle and Siebel Systems, though it may take some time for those benefits to emerge.

Oracle's US$5.85 billion acquisition of Siebel is set to close Tuesday following a vote by Siebel shareholders. The two companies agreed to the deal in September.

To date, the disposition of Siebel products and technologies, such as its Business Analytics tools and the OnDemand hosted CRM offering, remains unresolved.

Oracle declined to comment for this story, preferring to wait until the deal closes. However, following the move to buy Siebel, Oracle executives had expressed keen interest in some that company's offerings, including OnDemand, which is hosted on systems from Oracle rival IBM.

Despite the lack of a firm plan from Oracle executives, five Siebel users said they are still either upbeat or neutral about the deal. Most said they don't anticipate immediate benefits because they expect the integration of the companies and products to be a complex, long-term project.

"I think this integration is going to take a while," said Mike Thyken, CIO at Select Comfort, a Minneapolis-based mattress retailer that runs the Oracle E-Busines Suite 11i and is installing Siebel's analytics application.

Like a number of users running both vendors' software, Thyken said he hopes that Oracle integrates its ERP software with Siebel's products at some point.

However, he added, large mergers "are big and difficult projects. I would rather they take their time and do it right the first time rather than rush a half-baked integration out the door to please analysts."

"We don't have any expectations that this is going to be a quick merger," noted Robert Martens, director of global front-office technology at Ingersoll-Rand. "We're expecting it to be a longer-haul project."

The Hamilton, Bermuda-based provider of services and products to the transportation and other industries runs Siebel CRM, both in-house and through the OnDemand hosted format.

In the near term, Martens said he hopes Oracle, which provides his company with back-end CRM software, will create an OnDemand "global solution" by adding data centers throughout the world.

At the same time, Oracle is running the risk that some Siebel customers will turn to other vendors as it works on an integration plan.

"A number of customers are in a wait-and-see mode," said Rob Bois, an analyst at Boston-based AMR Research. "They're evaluating potential alternatives" just in case Oracle moves in a direction they don't like.

On the other hand, said Bois, replacing Siebel wouldn't be an easy task because many users have heavily customized the software. Any migration to a new supplier could take years, he said.

"Obviously, there is risk [that users will flee] with any acquisition like this," said Marc Hebert, executive vice president of Sierra Atlantic in Calif., and a user of Siebel CRM OnDemand and Oracle Financials software.

Oracle must undertake the same type of outreach done with its earlier PeopleSoft acquisition to avoid losing customers, Hebert said. He said it's likely that customers are confused, noting that the combined company will have four separate CRM tools among other overlapping product lines.

"They need to make more clear about [what] they are doing with Siebel than they did last year," Hebert said.

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