Blog: Claudia Imhoff

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Oracle to buy Siebel?

Yeah -- when donkeys fly. At least that is the sentiment among the analyst community. Apparently the rumors were flying about a potential sale to Oracle because Sieble reported pretty puny quarterly earnings. On the surface, these talks may seem plausible but there may be reasons why this is not such a good idea.

According to an article written by John Pallatto, columnist for eWeek, there are several reasons why this marriage would not be viable:

1. Such a buy-out would create tension between Oracle and some other big names in the CRM space -- like SAP, IBM, and even arch nemesis, Microsoft. Somehow, I don't think that would bother Larry Ellison.
2. Why would Oracle want MORE CRM software? That is perhaps the better question. Oracle is still digesting PeopleSoft and all of its CRM capabilities and they have their own homegrown CRM products. All need to be integrated. Siebel's products are fairly redundant with what Oracle already has.
3. Then there is the question of whether Tom Siebel, whose ego is no small thing, could swallow his pride and do what is best for his shareholders before the prospects for the company dim even further.
4. Of course, you have to question whether or not another multibillion dollar deal would strain Oracle's financial position too much. They have been busy little beavers buying up a number of companies so their financial position is not to be taken lightly.

Finally, how would Sieble's customers react to such a deal? Probably not with great cheers and sighs of relief, huh?

Maybe we should rekindle the rumor that Carl Icahn is buying the company? That would keep everyone talking for at least a day.

Yours in BI success,

Claudia

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