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Oracle dives into PRM

Entering the applications space puts Oracle in head-to-head competition with many companies that it relies on for other income streams.

Expanding its growing relationship management product line, Oracle will unveil a new application for managing partner...

channels.

The new application, called Oracle Partners Online, will see first daylight as one of a slew of products from the Oracle E-Business Suite debuting at the company's AppsWorld show held in Amsterdam.

Context

Although Oracle's initial reluctance to enter into the CRM market forced the company to play a comeback game against new archrival Siebel, the database giant has shown it can pitch a good story to enterprise customers. Oracle's dominant position in databases and large foothold in the ERP market allows the company to pitch itself as a single source for everything needed to run a business -- and it hasn't hesitated to do just that, even when pieces of the application puzzle were still missing.

Some of those pieces, including a partner relationship management tool, are now starting their lifecycles. As with the rest of the company's young CRM and supply chain applications, Oracle will be focusing on the easy integration between all its applications. The argument that Oracle is putting forth certainly sounds sensible -- why bother paying for extensive customization from a services unit of a vendor or from a systems integrator when Oracle's applications already work together. For an application like Partners Online, which aims to let companies share, refer and work sales opportunities with their partners, Oracle can point to order entry, accounting and sales automation applications it sells as obvious points of integration. Marketing automation, to manage joint campaigns, is another clear area for integration.

Unfortunately for Oracle, the winds may be shifting away from this all-in-one approach and back toward the so-called best-of-breed approach. Even if the shift doesn't sweep the entire market, customers are at least contemplating tackling the integration work needed for a best-of-breed approach because it allows them to solve the most pressing problems immediately and then deal with other areas later.

Competition

As in most of the fields that skirt the edges of CRM and ERP, there are several point-solution vendors focusing solely on partner relationship management. And there are, of course, the main relationship management vendors that also offer varying degrees of PRM functionality. Oracle must compete in this space with companies such as ChannelWave, OnDemand and Click Commerce, which claim the only way to truly make a partner network run smoothly and as a profit center is to use an application from a vendor that really focuses on the problems of partners. Other e-commerce vendors have subsumed PRM into their broader product sets, as well, most notably Haht Commerce.

It is when it comes up against these companies, that Oracle will start hammering away on the integration problems inherent in choosing a best-of-breed method. In return, these vendors can point out that Oracle's applications are designed to run atop an Oracle database; touting openness is an old argument, but it still can sway customers with an infrastructure map as tangled as Bangkok traffic.

Oracle will also face competition from vendors it sees every day: PeopleSoft, JD Edwards and possibly SAP and Baan. When thrust into competition with these vendors Oracle will have a harder time differentiating its offerings. CRM vendors such as Siebel, Blue Martini and Pivotal have also begun to push into this area. When competing with them, Oracle will attempt to highlight its ERP applications and how well Partners Online works with them.

Conclusion

One of Oracle's most serious challenges with its entire applications line is conflict with existing partners. Like Microsoft before it, entering the applications space puts Oracle in head-to-head competition with many companies that it relies on for other income streams. Since many of the other application vendors run their applications on Oracle databases, these vendors may rethink their partnership in light of Oracle's headlong rush into the market. On the other hand, if Oracle can keep its partners relatively calm, it stands to win in almost every large account. If the customer chooses Oracle, the company garners the application revenue; if the customer opts for a competitor, Oracle still gets the database revenue.


the451 (www.the451.com) is an analyst firm that provides timely, detailed and independent analysis of news in technology, communications and media. To evaluate the service click here.

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