Oracle Ups CRM Ante with Freebies

Starting Monday, Oracle Corp. will provide free access to key components of its customer relationship management software package, hoping, officials said, to turn "core enterprise sales force automation (SFA)" software into a commodity.

By offering free access via a new Web site,, 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."

Among the components to be offered for free are calendaring, customer pipeline and sales forecasting modules, he said.

The service got an unofficial start two months ago, Barranchea said, and already has Covisint, the burgeoning procurement trading exchange for the automobile industry and Barclays Bank as early adopters of the service. 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.

The free service is an effort to attract customers to the value-added software.

While 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, Barranchea said. The target market is the mid-market -- user sites with sales forces of 50 to 500 salespeople, he said.

The browser-based access to SFA applications does not require additional hardware or software, according to Oracle officials. The service can be expanded to work with Oracle's e-business suite via exporting capabilities, but might require the assistance of a systems integrator or a consulting organization to help with migration.

Industry analysts said that while free SFA software is appealing, it may have many ancillary costs and complications.

"Oracle has been unsuccessful at selling its CRM product," said Erin Kinikin, analyst at Giga Information Group, based in Cambridge, Mass. "I wouldn't be surprised that it tried to give it away."

Kinikin suggested and Barranchea confirmed that this move is, in part, a reaction to, a former subsidiary of Siebel that was spun off last December.

"One of the key battles of CRM is the mind share of the sales rep," Kinikin said. The free offerings might cause sales forces to go against their corporate standard for SFA software, but "the problem with Web-only SFA is that sales people are not connected very often to the Web," she said. "Salespeople want [SFA] on their Palm Pilots and cell phones. [If you want] robust replication, you probably should pay for it," she said.

OracleSalesOnline will be getting Wireless Access Protocol (WAP) support, "and over the next 60 days we'll be adding Palm Pilot support," Barranchea said, in response. "The Palm Pilot support will be free."

The initial reports of Oracle's efforts caused Siebel Systems stock to fall Wednesday. The Siebel shares, traded over Nasdaq, dropped to 1583/4 points from 172, losing 131/4 points or approximately 8 percent. The Siebel stock closed up Thursday at 179 3/4.

This "vendor drama" has just begun and "you could argue that Larry Ellison spawned this industry," said Giga's Kinikin. Tom Siebel is a former Oracle employee who learned from Ellison, founder of Oracle, based in Redwood Shores, Calif. "This isn't going to be a friendly or pretty battle," she said. "They know how to fight dirty."

Eugene Grygo is an InfoWorld senior editor.

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