It seems that the great American spirit of competition is alive and well in the software industry.
Recently, database giant
sent out an email to financial analysts detailing its customer wins during its recently completed fiscal first quarter. Shortly after, rival
sent those same analysts a disparaging email refuting those claims.
What followed were counterclaims from Oracle and the kind of corporate sniping that can be expected when companies are moving in each other's core markets.
In its original email, Oracle claimed it sold its e-business suite -- a broad package of business software -- to companies including
. All of those companies, save Pitney Bowes, took some of Oracle's customer relationship management software in the deals, the company claimed. Of course, that software, known as CRM, has been Siebel's main stomping ground since former Oracle exec Tom Siebel founded the company in 1993.
In addition to those firms, Oracle said it had "CRM wins" at Norway's Braathens airline and start-up
. The email went on to say that previously announced customers, such as the Data Advantage Group, Toshiba Medical and
had "gone live" with Oracle's CRM software during the quarter, meaning the companies had installed and started running the programs.
In Siebel's email, the company said Oracle's claims regarding CRM fell into four categories: "Complete Fabrication, Creative Reclassification, Irrelevant and Verified." It then went into a didactic exercise of helping the analysts understand which claims fell into which category.
When Oracle got wind of that email, it sent out a third note, telling analysts that its customers had signed off on its claims prior to the firm making them.
Of course, this kind of corporate back and forth goes on all the time, to varying degrees, and Oracle isn't above pulling apart its own competitors' results, sometimes before the fact. Earlier this year, the firm's outside public relations firm sent out an email to reporters ripping on rival
results a day
they were actually released.
Funny thing about this latest salvo: Oracle never mentioned Siebel by name in its original email to analysts. While it highlighted a deal it claimed to win over German software giant
, it never uttered Siebel's moniker.
The Complete Package
Which makes you kind of wonder why Siebel responded so strongly to Oracle's claims.
As is the firm's practice, Siebel didn't return a phone call to ask why it decided to refute Oracle's note. Oracle did respond.
"Customers are now focused on buying from suite vendors. SAP and PeopleSoft are really our competition now," says Stephanie Aas, Oracle's investor relations chief, who sent the original email to analysts. "Siebel is really behind the game as far as the suite goes, and it's becoming clear that it's very dangerous to be a one-product company in this market."
Analysts say Siebel's tactics could be a sign that it's starting to feel the heat -- and not just from Oracle -- in a game that until recently was left to it alone.
"In CRM, you're seeing wins at Oracle, you're seeing wins at SAP, and you're seeing wins at PeopleSoft," says Erin Kinikin, an analyst at research firm Giga Information. "The reality is there are going to be more choices for customers, and Siebel is not going to have everything their own way anymore." (Both Oracle and Siebel are Giga clients.)
An Issue of Definition
To be sure, Kinikin noted that Siebel's CRM software license sales last year were bigger than all of Oracle's business software sales combined, excluding those in its main database business. And Jim Pickrel, an analyst at J.P. Morgan H&Q, says one of the problems is that the two companies can't even agree what CRM is.
"In general, Oracle is using a somewhat broader definition for what falls into the CRM bucket than Siebel does," says Pickrel, who rates both companies long-term buy. "I think it's generally true that most of the things that Oracle talks about as CRM wins are not primarily for the sales force automation and call center management applications that are generally considered the front and center of CRM." (His firm hasn't done recent underwriting for either company.)
Yet, at the same time, he, too, sees increased competition on what has traditionally been Siebel's sole turf.
"None of the big ERP
Enterprise Resource Planning guys are causing much distraction for Siebel on their own, but collectively, the distraction factor is going up," Pickrel says. "By this point in the evolution of the market, you would expect more than one strong player."
Seems that Siebel could be seeing strong players all around.