Siebel Shareholders to Vote on Oracle Bid

The company welcomes Oracle's interest, but what will the acquisition mean for Siebel's Component Assembly platform and Oracle's Fusion Middleware?

January 2006 will do more than lead off the new year. It will likely add another company to Oracle Corp.s ever-expanding roster of acquisitions.

Siebel Systems Inc. released a statement late Thursday saying that its shareholders will vote on Jan. 31 to approve Oracles intended $5.85 billion buyout bid.

Given Siebels apparent delight with Oracles offer—the company has been on shaky ground for several years with either a turnaround or an acquisition imminent—its expected that shareholders will approve the deal.

In a statement Thursday, Oracle spokesperson Bob Wynn said, "We look forward to a favorable Siebel stockholder meeting on Jan. 31 and completion of the merger on the same day or very soon after."

The acquisition, Oracles twelfth in as many months, has already been approved by the U.S. Department of Justice and the European Commission.

Oracle said in September it would acquire the CRM (customer relationship management) software developer, and has plans to make Siebels software the foundation for its next-generation Fusion CRM suite.

Fusion is Oracles attempt to combine the "best of" functionality from its Oracle E-Business Suite, PeopleSoft Enterprise and JD Edwards EnterpriseOne suites (JD Edwards is a company PeopleSoft acquired before it was acquired by Oracle in a nasty battle that culminated early in 2005).

Fusion Middleware is the underlying infrastructure platform that will enable, for example, integration of various application components and native business intelligence within the Fusion applications.

Bringing in Siebel as the foundation for Fusion CRM makes sense, given the companys market dominance in on-premises CRM software, but that decision will likely throw a wrench in Oracles development timeline.

When Oracle launched its acquisition bid for Siebel in September, Siebel was hip-deep in finalizing the development of Project Nexus (now branded Component Assembly), a services-based composite application development platform launched the following month.

Siebels Component Assembly platform is somewhere in the range of what SAP AG is creating with NetWeaver, and Oracle with Fusion Middleware: It allows users to build composite applications using an "applistructure," or underlying middleware platform, that supports that companys application components.

So the real question becomes, once the acquisition is complete, what will Oracle do with Component Assembly?

What Component Assembly brings to the table is a specific way of defining the functionality that manages customer data and then links the profiles of the same customer across applications.

One of the key elements of the Fusion Middleware architecture is defining the customer model and then using that to define XML interfaces that Web services will look for in calling out services, according to Joshua Greenbaum, principal of Enterprise Applications Consulting, in Berkeley, Calif.

/zimages/3/28571.gifSiebels CEO urges customers to stay the course. Click here to read more.

"Oracle is going to have to say, This is how we are defining the customer record, and every one of those will have to be deeply integrated with Fusion—thats a lot of work," Greenbaum said in an October interview. "They dont want to lose some of the good stuff in PeopleSoft CRM, or Oracle CRM, and they want to add CRM into some of the Retek stuff [a retail software company Oracle acquired in March]. So the definitions that are in Nexus are going to touch every bit of Fusion, and thats a big job."

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