Oracle Outlines Plans for Siebel Integration

Oracle announces plans to lay off its own employees and not include Siebel's technology in its Fusion architecture.

Oracle clarified some looming questions during its Feb. 9 conference call with analysts to lay out its integration plans for Siebel Systems.

First, Oracle plans to lay off more of its own employees than it does Siebels employees—about 2,000 in total, trimming about $400 million in costs.

The layoffs, scheduled to occur over the next several weeks, will come primarily from back office and administrative (nonrevenue generating) positions, but some cuts will come from development and sales as well.

Second, Oracle has no plans to utilize Project Nexus, Siebels next-generation composite application platform announced last October, in its next-generation Fusion Architecture—a statement that quells many questions as to what Oracle would do with Nexus, and whether that would become part of the companys Fusion Middleware platform.

"We said when we were building Fusion, were building entirely on standards," said Larry Ellison, Oracles cofounder and CEO. "Nexus was not a standards-based product. Siebels next generation was going to be Nexus and we are not going to continue that. We will support existing Nexus customers, but there are very few of them."

Oracle will, however, standardize on Siebels CRM (customer relationship management) technology—both on premises and on demand —as well as Siebels analytics capabilities, really the "crown jewel of the acquisition," according to Ellison.

Because it plans to fully utilize Siebels CRM development, technical marketing and sales—Siebel sales will remain a separate organization—a good number of Oracle CRM workers are likely out of a job.

"We had a very, very large CRM development organization, so there are some moves there," said Ellison. "We had more people than we need to develop CRM."

/zimages/1/28571.gifAnalysts expect sweeping Siebel layoffs from Oracle. Click here to read more.

On the flip side, Ellison said the company is retaining 90 percent of Siebels support staff, development engineers, sales and sales consulting engineers.

Charles Phillips, co-president of Oracle, rattled off a few core opportunities the company sees in terms of product integrations.

Siebels order to cash functionality will be integrated to the Oracle E-Business Suite Order Management Suite. Siebels on-demand sales will be integrated to the E-Business Suite and to the JD Edwards EnterpriseOne suite.

Oracle also announced lifetime support for Siebel applications, as it did for PeopleSoft and JD Edwards suites, which it acquired last year with the buyout of PeopleSoft.

Despite Ellisons hinting at other acquisitions to come in middleware and business intelligence areas at a recent public event, Phillips said Oracle has scaled its applications business with the Siebel acquisition.

"We have 31,000 customers. We are number one in CRM, and number one in several application areas," said Phillips. "We are without question number one in CRM, with 4,000 customers and 3.5 million users."

Phillips said Oracle has also become the market leader in on-demand software, with $400 million in revenue, and 300,000 subscribers. By contrast,, considered by many the current leader in on-demand CRM software, has 351,000 subscribers.

Arch rival SAP AG announced its on-demand CRM offering Feb. 2.

AMR Research analyst Robert Bois said in a research note that while Oracles messages are "all the right ones based on customer feedback," the company still has to walk the walk.

"Oracle has a huge R&D effort ahead in merging the functionality from multiple CRM products into Fusion Applications, as well as certifying any new modules across each of the ERP platforms," said Bois. "This will require a very delicate balancing act."

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