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Purchase Raises Questions For Siebel Clients

October 7, 2005
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Buying Siebel Systems expands Oracle chief Larry Ellison’s empire of workforce management software, but does the latest acquisition plan bode well for customers?

The deal will likely be a boon to businesses using Oracle’s human resources technology, according to some analysts. Katherine Jones, research director of human capital management at Aberdeen Group, says Siebel’s employee-relationship management product has some features that are more advanced than those of the PeopleSoft product, which Oracle acquired in its takeover of the company earlier this year. Siebel’s product is better than PeopleSoft at showing “what managers and employees are doing on a day-to-day basis” to affect corporate performance, Jones says.

Siebel focuses on software to track customer relationships but also offers a number of personnel management products, such as its workforce analytics software. “Siebel adds to Oracle’s functionality in terms of incentive management, capacity planning and other areas” in workforce management, analysts from AMR Research wrote in a recent report.

Oracle’s bid also raises questions about the fate of organizations now using Siebel’s workforce management technology. That’s not a huge number of customers, says Jim Holincheck, an analyst at research firm Gartner. He said Siebel accounts for a small fraction of the human resources software market, with some products having fewer than 40 customers. “We’re not talking large numbers for their HR products,” he says.

Even so, those clients may be wondering what’s to become of their investment. Michael Maoz, another Gartner analyst, says Oracle is more committed to its database/infrastructure products than its applications, including human resources technology. “Applications remain in some ways a stepchild,” Maoz says.

In response, Oracle said in a statement that its “commitment to its software applications business is stronger than ever.” With respect to the Siebel deal, “given that the companies have not yet merged, due diligence about product functionality continues and future plans have not been determined,” the company said.

Research firm IDC offered reassuring words for Siebel customers. “Oracle has already learned the lesson about ‘no forced marches’ in terms of application migration,” IDC analysts said in a recent report, “so you can rest assured that your Siebel road map will remain mainly intact, at least for several more years.”

Ed Frauenheim & Todd Raphael 

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