Blog: Colin White: What is the impact of Oracle's buyout of Siebel?

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What is the impact of Oracle's buyout of Siebel?

Following its acquisition of PeopleSoft, Oracle is continuing its buying spree by acquiring Siebel. This acquisition is a part of Oracle's continuing strategy to compete with SAP. With this in mind it's useful to look at the acquisition from both a product and company perspective.

On the product front Oracle faces the usual problem of integrating the Siebel product set into its product mix. It will be interesting to see, for example, what Oracle does with Siebel analytics, which was proving to be one of Siebel's more successful offerings.

Perhaps the more valuable discussion is to look the acquisition from a company perspective. Oracle obviously gains an important customer base. As with PeopleSoft, Siebel's products support a number of underlying database products. If I was a Siebel customer I would be very nervous at present if the database product I was using is other than Oracle.

The acquisition of Siebel puts Oracle in an even better position to compete with SAP. Oracle is quite a different company from SAP, however. Oracle has evolved from being a database and infrastructure vendor to also becoming an applications vendor. As a company it wants to own the whole environment and doesn't encourage third-party competitors. It has a reputation (as does Siebel) for aggressive sales tactics, and often its customers do not have a good working relationship with the company.

SAP, on the other hand, is an applications vendors that has now also become an infrastructure vendor. Its products support multiple database products and it actively encourages third-party software vendors. The SAP relationship with Microsoft is a good indication of this strategy. SAP also encourages a good working relationship with its customers. If I was in the market for packaged application solutions these differentiators would play a big part in the decision making process.

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