Recent industry acquisitions have confused users about what the future holds, spurring two competitors' switch-to-us promotions.
Posted Sep 29, 2005
Onyx Software announced today that it would subsidize up to $500,000 of professional services expenses for new customers who give up Oracle-owned CRM implementations in favor of Onyx's Customer and Process Management solutions. This customer migration offer, which Onyx officials say had been in development for some time, has been launched to capture customers uncertain about the future of Oracle's expanding product family, including J.D. Edwards, Oracle, PeopleSoft, Siebel Systems, and Vantive.
The announcement of Onyx's migration offer, which expires March 31, 2006, comes at a time when CRM users are struggling to find their footing in a changing landscape of enterprise providers. "Oracle's move to acquire Siebel has created uncertainty in the market, and it is unclear what the future holds for customers in terms of product innovation, delivery times, and ultimate cost," said Janice Anderson, Onyx Chair and CEO, in a written statement. "We are talking to a number of enterprises, especially on earlier versions of Oracle, Siebel, and PeopleSoft, who are seriously considering their options."
According to Patrick Angelel, vice president of marketing, the company expects to see immediate interest in its promotion. "Oracle can really only support one CRM line in the long term, so there will be pain for those customers who are not using that line," he says. "We hope to see a lot of traction with Vantive customers, and also with buyers of Oracle CRM who never got what they wanted out of the license."
Kimberly Collins, research vice president at Gartner, says the moment is ripe for bold moves of this nature. "There is definitely confusion and uncertainty in the market, and it's coming from the customers. We get calls from enterprise CRM clients all the time now about this issue, and we've identified three main groups who have concerns about their future." These groups include PeopleSoft and Siebel customers who are not using current versions of the applications, and are now faced with upgrade costs and an uncertain migration path; customers who had bought PeopleSoft or Siebel, but are still waiting for the implementation and are worried about throwing good money after bad; and organizations that have a preference for IBM or Microsoft technology, and are now faced with changing to Oracle-friendly equipment and processes. "This is a good time for companies like Onyx to capitalize on customers looking for alternatives," Collins says. "If they're not already invested in alternatives like SAP, they will be interested in seeing new options."
Collins also points out that $500,000 isn't much to give up when installing enterprise applications, which can have 10 times that value or more to the vendor. "The half-million dollars is a credit toward professional services, not to software licenses," Collins says. "One of the things Onyx needs to do is grow license revenue, so they're giving a little in hopes of getting a lot. Onyx is trying to get more visibility in the market, and is using the uncertainty and confusion created by Oracle's acquisitions," Collins says.
Another Onyx goal is to expand partnership opportunities. Collins notes that the program could cause difficulties on that front. "It's one thing for Onyx's own professional services revenue to take some $500,000 hits, but if the company wants to grow partners, it won't want them to pay," she says. Angelel confirmed that Onyx would absorb the services revenue reductions for its partners.
Onyx is the highest-profile CRM vendor to make a run at Oracle customers, but it isn't the first to try to entice them away from Oracle with financial incentives. On Sept. 14, Salesboom.com made a play to carve off Siebel's hosted customers with its "Off Siebel OnDemand CRM Rescue Operation," which promises free data migration to Salesboom.com's on-demand service and 100 percent credit for the remainder of any existing Siebel OnDemand contracts. That same day, support services vendor startup Rimini Street said it would support Siebel applications for half of what Oracle would charge.
Onyx has been busily refocusing its attention on the upper midmarket and enterprise segments, going head to head in a space where Siebel has traditionally been very strong. "Our value proposition is that Onyx is the only company following the consolidation that provides comprehensive, consistent functionality on an enterprise platform, that includes the flexibility and customization that customer organizations need," Angelel says. "We're offering Oracle customers a path with certainty about where they will stand in a year."
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