Money Matters - Simplified

HP to Sign Deal With Salesforce, May Dump Oracle Siebel

 PC giant Hewlett-Packard (NYSE: HPQ) is probably going to sign a mega customer relationship management (CRM) deal with (NYSE: CRM) for about 35,000 to 40,000 seats, a move that might end up replacing Oracle(Nasdaq: ORCL) Siebel as its CRM provider.


 "HPQ is completely shutting down Oracle Siebel, which contacts tell us has made Oracle very furious. Contacts tell us that by moving to Salesforce, HPQ may be saving 40 percent-50 percent over ORCL Siebel," Trip Chowdhry, an analyst at Global Equities Research said, citing industry contacts.

Salesforce wants to close the deal with HP before its Dreamforce event, Chowdhry said. Dreamforce 2010, a cloud computing event hosted by Salesforce, takes place between Dec. 6 and Dec. 9 in San Francisco.

Chowdhry said his contacts are almost 100 percent sure that, if HP signs the mega deal of greater than 35,000 seats or so with Salesforce before the Dreamforce event, someone from HP will deliver the keynote at the event.

The analyst also said some of its contacts are hearing that HP's new CEO Leo Apothekar may show up at Salesforce's Dreamforce event.

If the deal happens, this would represent significant shift within the technology industry.

On the other hand, the analyst said Salesforce may feel confident that now is the time to move away from under the shadow of Oracle, and "Claim to the Enterprise World that is the New Oracle; just like Google is the New Microsoft; and Microsoft is the New Xerox!"

Both Oracle Siebel and Salesforce offers customer relationship management (CRM) software for businesses. The work of CRM involves focusing on service automated processes, information gathering and processing, integrating and automating various customer serving processes in a company. It also manages to keep track of customer preferences, buying habits and deals with customer service requests.

The key difference between Oracle Siebel and Salesforce solutions is that Siebel is more sophisticated but complicated to use, where as has better graphics and easier-to-train employees, but it's not as comprehensive.

Oracle, which bought Siebel Systems in 2006 for $5.85 billion, currently offers about 50 CRM applications that are able to provide for all the customer service requirements of small, medium and large industries. Its solutions are more comprehensive and offer greater functionality and reliability.

Meanwhile, Salesforce allows a company to handle all their business applications with a single data model, one sharing model, and one user interface. It offers a shared enterprise application that provides for collaboration, reporting, data sharing, etc.

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