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It's ironic, but not overly significant, that Siebel turned in an estimate-busting quarter on the heels of the news of its acquisition by Oracle.
The sudden uptick in big deals reported by Siebel not only made Oracle look good, it also caused ripples across the enterprise software landscape. Could Siebel's good quarter mean vindication for its big-bang, big CRM business model? And what would such an eventuality mean for SAP and its growing battle with Oracle?
The bottom line is that it's unlikely that Siebel's penultimate quarter as an independent company augurs a fundamental shift in the enterprise software market, or the competition between SAP and Oracle.
As Charlie di Bona of Sanford Bernstein wisely pointed out, the numbers Siebel is now turning out look similar to the big numbers PeopleSoft was able to scarf up just before it was taken down by Oracle. In the case of PeopleSoft, the flurry of last minute deals effectively drained the sales channel and made PeopleSoft's subsequent quarters under Oracle relatively weak by comparison.
PeopleSoft's Craig Conway needed strong sales to justify keeping his company away from Oracle, and in effect pulled out all the stops to keep the flag flying as long as he could.
In Siebel's case, I reckon almost the opposite was true.
Prospective Siebel customers, particularly those contemplating big ticket deals, were reluctant to sign on until the Oracle deal was announced. Siebel's future had been questionable for some time, and while there had to be some future for the former market leader, the uncertainty of what that future would look like made it hard to sign on the dotted line.
Once it became certain that Oracle would take over the company -- and that, with two weeks left to the quarter, Siebel CRM would form the core of Oracle's forthcoming Fusion CRM --Siebel prospects, lured most likely by some impressive deal-making, were suddenly much more willing to sign on now that Larry was taking over.
If di Bona is right again, and I believe he will be, this uptick will be short-lived, and Oracle will be back in the weeds fighting tooth and nail for every software deal against SAP. And Oracle will face the same potential problems with customer defections that it now faces with PeopleSoft. SAP's job is now harder than when Siebel was independent, but in the end the Oracle/Siebel combination will only add bulk, not significant competitive threat, to Oracle's position against SAP.
Joshua Greenbaum is a market research analyst and consultant at Enterprise Applications Consulting. He has more than 15 years of experience in the industry as a computer programmer, systems analyst, author, and consultant. Prior to starting his own firm, Enterprise Applications Consulting, he was the founding director of the Packaged Software Strategies Service for Hurwitz Group, which focused on technology, infrastructure and business issues in the enterprise applications market.