Oracle sets sights on CRM

With PeopleSoft products and employees now in the fold, Oracle is turning its attention to applications, and that includes a healthy dose of CRM, according to executives.

The PeopleSoft offices in Pleasanton, Calif., are now essentially empty and the road map for the company's products

are laid out in Oracle's Project Fusion .

With much of the work of integrating a major software company now done, Oracle Corp. will be pushing CRM in the coming year, executives at the Redwood Shores, Calif., headquarters said earlier this month.

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"We have six application priorities for this year and two of them are around CRM," said Robb Eklund, vice president of CRM product marketing. "Two years ago there was very little appetite for CRM. I think there's huge enthusiasm now."

Eklund, a former PeopleSoft employee, has been reunited with some of his former colleagues as Oracle kept on 3,000 PeopleSoft developers. In what is perhaps a greater sign of its commitment to CRM, Oracle at the beginning of the year established a dedicated global salesforce for CRM.

"I would say they've incorporated a lot of the key personnel from PeopleSoft in the development of CRM," said Rob Desisto, senior analyst with Stamford, Conn.-based Gartner Inc. "Let's face it; it's a challenging thing when a company like Oracle buys three application vendors. We're seeing some semblances of progress."

Over the next year, Oracle will focus on three key CRM initiatives, according to Barbry McGann, vice president of product strategy.

"PeopleSoft had started to move to SOA [service-oriented architecture] through a partnership with IBM," McGann said. "They were leveraging services where it makes sense for their business. Oracle is doing the same thing. We're going to do Fusion by leveraging the best of Oracle, J.D. Edwards and PeopleSoft. This modular approach will be one of our focuses moving forward."

Additionally, Oracle will concentrate on some of the key vertical industries where it has seen success. Traditionally, Oracle was stronger in the manufacturing and product industries while PeopleSoft was stronger in financial institutions and services companies. Desisto expects that same breakdown of products and industry to continue.

"Finally, the dust has settled and they're going to focus and target these products on the segments and application areas where they've been most beneficial," Desisto said. "At the component app level, they are going to have to make some decisions on which products will make it into Fusion and what will be cross-sold into the install base."

Where Oracle has fallen behind is the lack of an on-demand CRM product, Desisto said. Already, Siebel Systems Inc., which tested the model only to back out several years ago, has returned to the hosted market with Siebel OnDemand, following the success of companies like Salesforce.com and RightNow Technologies Inc.

McGann, however, counters that the hosted model has seen success because the costs of owning software have increased at too fast a pace.

"We can bring down the cost of the technology stack enough that the benefits of owning outweigh the cost of hosting," McGann said. "People are buying for the business pain they have. We have adjusted pricing to providing just what you want instead of all you can eat."

Reducing the total cost of ownership for Oracle CRM is the third area of focus this year.

"This is a maturing industry," Eklund said. "There's less and less competing on features and functionality. It's turning toward the cost price point."

Initially the company will focus its CRM sales on the current customer base, particularly with order management and the call center applications.

"With strong demand, coupled with customer references, there's lots of runway left in penetrating the install base," said Dave Stephens, vice president of CRM development. "One side effect [of the PeopleSoft acquisition] in a lot of customer environments is that we've moved up the most important vendor list. They might be more likely to look to Oracle for an enterprise deal now."

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