Oracle Takes Aim at Salesforce.com
Salesforce.com (NYSE: CRM) has been a dominant force in the sales force automation and CRM markets, thanks to the company's early embrace of the cloud.
Oracle (NASDAQ: ORCL) hopes to halt that momentum. At this week's Oracle OpenWorld conference in San Francisco, Oracle CEO Larry Ellison saved some of his most pointed comments for Salesforce.com.
Early in his talk, he got on a roll about cloud computing, complaining that some vendors were rebranding old technology and calling it "Cloud Computing." Then he got specific and claimed that Salesforce.com is really only offering software as a service (SaaS), which he dismissed as ten-year old technology. He considers Salesforce merely SaaS and not the cloud.
He accepted that cloud definitions varied widely, but offered his own.
"The cloud is a standards-based application, development and execution platform that includes hardware and software, is virtualized and elastic, and runs many apps," said Ellison. "It can run on both public and private clouds."
He held up the example of Amazon Elastic Computer Cloud (EC2). Ellison said you can build any app on an Amazon cloud, as it is virtual, based on open standards and works with Linux, Java, Oracle, MySQL, and so on. In addition, it is elastic — you pay for what you use.
How does Saleforce.com compare? Not very well, according to Ellison.
"Salesforce.com is merely one or two apps running over the Internet. It isn't virtualized,
is proprietary and has weak security," he said.
He said customer data is dumped into one large database pot in Salesforce.com, as opposed to being held separately customer by customer. He said each customer's data needed to be protected through isolation by virtualization, while also having fault tolerance added and the eradication of single points of failure.
A true cloud application can scale up and down seamlessly in pace with demand, said Ellison. EC2, he said, fits the bill, while Salesforce.com does not. Why? It has to throttle down demand by turning off non-mission critical functions to ensure that application performance remains high.
The licensing model of Salesforce.com also came in for attack. It is priced per number of users, not by what is used.
Is Oracle Exalogic and CRM the Answer?
So what does Ellison offer up for sales force automation? He made the case that the new Oracle Exalogic Elastic Cloud provides a cloud-in-a-box architecture to help companies implement the cloud in the CRM field.
Oracle backs this up with a range of CRM tools that could sit on such a box such as Siebel CRM, CRM on Demand and a new batch of Oracle Fusion applications that include CRM modules.
Anthony Lye, vice president of Oracle CRM, covered Oracle CRM on Demand release 18, which includes a ton of new features.
"Probably the most significant change is adding best-in-class marketing," said Lye.
He said the CRM vendor community has been saying for years that it covered sales, service and marketing equally well. This, he said, was a misrepresentation.
"We did well in sales, pretty good in service and did nothing at all in marketing," said Lye.
The result: Companies with a CRM system had to go to a third party for a complementary marketing tool. To address this, Release 18 has sales force automation along with marketing and a demand generation system.
"We can provide a single solution that is supported by one central data warehouse," said Lye.
Page 2: Business Planning, Oracle Fusion Apps
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Business Planning, CRM Combined
Business planning has also been added to Release 18. Lye said the standard practice for business plans has been to have them written in Microsoft Word and then get lost in the files. In this new Oracle CRM release, managers can monitor how well users are performing against those plans.
Lye summarized some of the other new capabilities of Release 18: Delivering qualified leads at lower cost; enterprise-grade cloud security; network and access control; and a new "Insurance On Demand" solution for broker/producer channel management.
Release 18 also delivers enhanced lead quality, with progressive profiling and advanced data integration, allowing companies to target potential customers with more relevant messages using adaptive campaigns, and to increase conversion rates.
Over time, CRM on Demand is having more features added from the Oracle 11g database to enable such features as policy definitions, a reporting engine and better data encryption.
"DBAs can see the data when it is in the database," said Lye. "This will encrypt the data at rest to prevent administrators from seeing the data."
On the Siebel front, Siebel CRM functionality is being made more broadly available in innovation packs. Those on an earlier version of Siebel, therefore, can harness a specific function without having to upgrade everything else.
Oracle Fusion Applications
Additionally, Oracle is at the tail end of a massive five-year project to create Fusion Applications, which have integrated open standards-based middleware and the most up to date features.
"CRM forms a big part of the Fusion portfolio," said Lye. "This will be the most modern set of apps on the planet."
By taking advantage of commercially available middleware in Fusion, it becomes easy to tack on multiple features. Collaboration and social networking, for instance, can be backed into CRM without the need for heavy integration work and long-term middleware projects.
"Integration is typically the biggest investment," said Lye. "But the integration cost between one Fusion module and another Fusion module would be zero."
Fusion CRM, which will be released early next year, can be deployed on premises or on demand. Lye said some areas of a company could implement Fusion on demand while others opted for on premise. But at the same time, both would share a single database.
So does this mean that Siebel and CRM on Demand are going to disappear soon? No, said Lye. He thinks many users will leave Fusion alone and continue to deploy existing products for many years to come.
"We will continue to release Siebel CRM and CRM on Demand for their entire lifecycle," said Lye. "Our product roadmaps for these tools stretch for many years into the future."
While some will take a very cautious approach, others will begin with smaller Fusion deployments. Perhaps they will start with modules not available currently in Siebel such as territory planning. These fusion modules are designed to interface with Siebel seamlessly. Still others will rip out Siebel and install Fusion applications across the board.
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