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Tuesday, October 31, 2006

Oracle Needs to Keep the Customer Satisfied

By William Trent, CFA of Stock Market Beat

We have discussed Oracle’s (ORCL) acquisition strategy several times, and believe it is the correct path for the company. However, the devil is always in the details, and with an acquisition strategy the details include making sure customers of both the parent and the acquired company remain satisfied.

As ComputerWorld reports, Oracle is having mixed success on that front.
Some Siebel CRM users interviewed at the Oracle OpenWorld user conference here last week said Oracle has been slow to provide details on its pledge to integrate Siebel and Oracle products and to reveal its long-term plans for its CRM product lines.

She said Oracle executives have given mixed messages about the future of the Siebel middleware products. Depending on Oracle’s plans, EDS may have to replace the Siebel middleware with software from Oracle, Reeves noted. “It’s an open question for the future,” she said.

Reeves said she hopes that Oracle moves to ease the migration to new versions of its tools. The process is now quite costly, mostly because EDS has to customize each new version, she said.
“Easing that migration and helping customers upgrade without significant financial drain is very important,” Reeves said.

At this point, it sounds like they aren’t so much ready to switch vendors as anxious to learn what improvements may be planned and how that might affect their own implementation plans. However, integrating software is a complicated process (IBM, Accenture and others make billions each year helping companies do it) and it may be unfair to expect a detailed roadmap so quickly. On the day-to-day service front, Oracle appears to be doing a much better job.
A couple of Siebel users said that Oracle’s services operation has equaled and in some cases exceeded that of the former Siebel Systems Inc.

Richard Napier, business development manager at InFact Group, a software consulting firm and systems integrator in Plano, Texas, said software patches and upgrades are easier to locate on the Oracle Web site than they had been on Siebel’s.

“In all our dealings with Oracle, we notice better communication, more efficiently handled service requests and basically more information” than Siebel offered, he said.

As long as the integration road map is worth the wait, Oracle should manage to pull everything together.

The author may hold a position in the securities discussed. A current list of the author's holdings is available here.

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