Starting this week, Oracle Corp. will provide free access to key components of its CRM (customer relationship management) software package, officials said, hoping to turn core enterprise SFA (sales-force automation) software into a commodity.
By offering free access via a new Web site, OracleSalesOnline.com, Oracle is taking aim at competitor Siebel Systems Inc., based in San Mateo, Calif. "I challenge Siebel to do the same thing," said Mark Barranchea, senior vice president for Oracle's CRM product division. "What Hotmail did to e-mail, we want to do for core SFA." Calls to Siebel for comment were not returned by press time.
Among the components to be offered free are calendaring, customer pipeline, and sales forecasting modules, Barranchea said. Over the coming months, Oracle will offer WAP (Wireless Application Protocol) support and Palm support, he added.
The hosting service got an unofficial start two months ago and already has Covisint, the burgeoning procurement trading exchange for the automobile industry, and Barclays Bank PLC as early adopters, according to Barranchea.
Oracle has "probably around 100" users of its direct SFA products, and "300 customers in the first 60 days" of its hosted SFA offerings, he said. "We have not done well in direct SFA, but that's one module in more than 70," he said.
Although the core software is free, Oracle will charge users on a pay-as-you-go basis for additional modules such as compensation, travel, time and expense, and outbound proposal generation. The target market is the mid-market -- sites with sales forces of 50 to 500 salespeople, he said.
An analyst at Stamford, Conn.-based Gartner Group Inc., Michael Maoz, said that the move is evidence that Oracle has been "doing really badly in this market -- they were giving the software away for free anyway in most of [their] recent deals."
Oracle is "mistakenly" attempting to stop Siebel "by freezing the market for a while," Maoz said. Siebel will not suffer, but a potential freeze could hurt Saleslogix, Goldmine Software Corp., MultiActive Software Inc., Firepond, and Quintus Corp. as well as SAP AG and PeopleSoft Inc., Moaz said. Smaller players with similar offerings will need a vertical or small-to-medium-sized business strategy in order to succeed; PeopleSoft and SAP will face users who will now have a new "negotiating weapon," he said.
Among the drawbacks of free access to Oracle software are its underlying "support costs [and] maintenance fees," and the fact that the back-office integration is restricted to Oracle's ERP (enterprise resource planning) suite, Maoz said. Oracle's CRM software was "not best-of-breed in any area and sales were poor before. Giving away something nobody wants is easy," he said.
This "vendor drama" has just begun, said Erin Kinikin, an analyst at Giga Information Group Inc., based in Cambridge, Mass. "This isn't going to be a friendly or pretty battle. They know how to fight dirty."