“New” Analysis of Oracle Market Share is Old News
By Willaim Trent, CFA of Stock Market Beat
Sometimes we wonder what value is being added by these market analyses that tell us what happened last year, long after it is public knowledge. In this case, the analysts at Gartner inform us that Oracle lost share to SAP in customer relationship management applications despite buying Siebel and Peoplesoft.
The problem is, we all knew Oracle was having trouble in apps last year. And the report comes out a week after Oracle’s blockbuster positive preannouncement that app sales rose 56 percent on an organic basis. Anyway, here’s a summary if you want to know what happened last year. (Actually, we did appreciate the last paragraph on the market share of the boutique vendors - despite our ribbing, there is some value to that kind of information.)
Only time will tell if Oracle Corp. got a bargain when it coughed up nearly $6 billion for Siebel Systems Inc. last year.
But if Oracle was betting that the addition of Siebel and its prodigious customer base would help it leapfrog over SAP AG to CRM market dominance, it—or CEO Larry Ellison, at any rate—was mistaken.
That’s the conclusion of the latest research from market watcher Gartner Inc., which found that SAP—and not the combined Oracle/Siebel—was the CRM market leader in 2005, on a revenue basis, at least. The CRM market as a whole is far from saturated: revenues increased by 13.7 percent from 2004, driven in part, Gartner research director Sharon Mertz says, by renewed business confidence amid a healthy commercial economy.
For the year, Gartner researchers say, SAP grew its CRM market share at both Oracle’s and Siebel’s expenses. Both firms bled CRM market revenues, Siebel ceding between 5 and 6 percent of its market share (even though it actually grew its revenues by about the same margin) and Oracle—the CRM practice of which includes the former PeopleSoft, too—hemorrhaging as much as 22 percent of its market share. SAP, on the other hand, posted solid if unspectacular market share growth (5 percent) while at the same time growing its revenues by almost 16 percent. Elsewhere, CRM-as-a-service pioneer Salesforce.com all but exploded—growing its modest market share by almost 35 percent (and its revenues by 44 percent). SAP’s performance gave it the CRM market lead, with more than a quarter of all revenues (25.9 percent) followed by the combined Oracle and Siebel with 23.4 percent. Salesforce.com was tied for third with Amdocs, both at 4.9 percent market share.
Going forward, the efforts of SAP and Oracle—and, to a lesser extent, Salesforce.com and Amdocs—will almost certainly focus on that elephant in the CRM market room: the roughly 41 percent of market share controlled by boutique and specialty CRM vendors, who in 2005 generated $2.33 billion in revenue.
http://www.stockmarketbeat.com/
Sometimes we wonder what value is being added by these market analyses that tell us what happened last year, long after it is public knowledge. In this case, the analysts at Gartner inform us that Oracle lost share to SAP in customer relationship management applications despite buying Siebel and Peoplesoft.
The problem is, we all knew Oracle was having trouble in apps last year. And the report comes out a week after Oracle’s blockbuster positive preannouncement that app sales rose 56 percent on an organic basis. Anyway, here’s a summary if you want to know what happened last year. (Actually, we did appreciate the last paragraph on the market share of the boutique vendors - despite our ribbing, there is some value to that kind of information.)
Only time will tell if Oracle Corp. got a bargain when it coughed up nearly $6 billion for Siebel Systems Inc. last year.
But if Oracle was betting that the addition of Siebel and its prodigious customer base would help it leapfrog over SAP AG to CRM market dominance, it—or CEO Larry Ellison, at any rate—was mistaken.
That’s the conclusion of the latest research from market watcher Gartner Inc., which found that SAP—and not the combined Oracle/Siebel—was the CRM market leader in 2005, on a revenue basis, at least. The CRM market as a whole is far from saturated: revenues increased by 13.7 percent from 2004, driven in part, Gartner research director Sharon Mertz says, by renewed business confidence amid a healthy commercial economy.
For the year, Gartner researchers say, SAP grew its CRM market share at both Oracle’s and Siebel’s expenses. Both firms bled CRM market revenues, Siebel ceding between 5 and 6 percent of its market share (even though it actually grew its revenues by about the same margin) and Oracle—the CRM practice of which includes the former PeopleSoft, too—hemorrhaging as much as 22 percent of its market share. SAP, on the other hand, posted solid if unspectacular market share growth (5 percent) while at the same time growing its revenues by almost 16 percent. Elsewhere, CRM-as-a-service pioneer Salesforce.com all but exploded—growing its modest market share by almost 35 percent (and its revenues by 44 percent). SAP’s performance gave it the CRM market lead, with more than a quarter of all revenues (25.9 percent) followed by the combined Oracle and Siebel with 23.4 percent. Salesforce.com was tied for third with Amdocs, both at 4.9 percent market share.
Going forward, the efforts of SAP and Oracle—and, to a lesser extent, Salesforce.com and Amdocs—will almost certainly focus on that elephant in the CRM market room: the roughly 41 percent of market share controlled by boutique and specialty CRM vendors, who in 2005 generated $2.33 billion in revenue.
http://www.stockmarketbeat.com/
posted by douglas mcintyre at 10:10 AM
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