Duck, MarcOracle ( ORCL) has been paying lip service to on-demand customer relationship management software for some time. It inherited the old Upshot business from Siebel Systems, which in turn was assimilated by the Borg-like database giant, but Oracle hasn't done all that much with the division, says Cowen analyst Peter Goldmacher. But now, he says, Oracle plans to "relaunch its offering with renewed vigor in the coming weeks." Unlike conventional software, on-demand software is run on the vendor's servers and is generally sold on a subscription basis. On-demand dramatically lowers the cost of ownership (OK, there's some disagreement about this) and has made the category one of software's hottest. And that, of course, has made a fortune for Salesforce.com ( CRM) and its hyperbolic CEO Marc Benioff. At first glance, the Oracle campaign appears to be bad news for Salesforce. But Goldmacher thinks otherwise. He figures that Oracle will be targeting the old Siebel base of Fortune 2000 companies, which isn't Salesforce's stronghold in the mid-market. Although Benioff points to his company's recent wins with Dell ( Dell), Cisco ( CSCO) and other giants, Goldmacher says the Salesforce offerings don't really compete with Oracle at the high end. Told of Goldmacher's research note, Benioff, who had just arrived in Zurich after attending the Davos economics conference, was in the somewhat odd position of having to say (implicitly at least) that Oracle is a threat. With characteristic bravado, he noted in an email exchange that such launches typically include a big ad in The Wall Street Journal, and that paper, he said, "is our customer." Look for an announcement of Oracle's intentions this week at a series of meetings with investors and the media in New York. Cowen does not have an investment banking relationship with Salesforce.com.
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