A Killer Replacement: Oracle Pulls the Plug On IBM

Oracle announced in June 2006 that it was replacing the Big Blue tech stack (which has supported Siebel Systems' Siebel OnDemand for three years) with--surprise!--its own. Siebel had used IBM technology and infrastructure since it launched the on-demand service in 2003, and in 2004 the two vendors signed a five-year deal to build a new service center and promote tighter delivery capabilities. Oracle's announcement, in September 2005, of its intent to acquire Siebel immediately introduced doubts about how long Siebel's service alliance with IBM would last. An important question still is, What consequences will the switchover have for Siebel OnDemand customers? The migration has already begun. New Siebel OnDemand customers are running on Oracle's technology, and existing ones will be transitioned throughout the rest of the year, says Charles Phillips, president of Oracle. "Typically, in our on-demand systems we don't take them down for maintenance," Phillips said in a conference call in June. "That's not possible on the current infrastructure." Industry pundits agree that Oracle is likely to support any customers that use DB2, IBM's data management software and hardware, considering how many outraged customers not doing so would create. In the near term customers might be concerned about performance issues, such as availability and scalability, but Oracle wouldn't allow either to slip, says Sheryl Kingstone, CRM program manager for Yankee Group. "Oracle was designed to be scalable and has always proven they could [be]," she says. "They won't drop the ball on Siebel customers." There might be minor differences in performance eventually, Kingstone says, since Oracle and IBM take different approaches to their respective databases. "If a lot of Siebel OnDemand customers rely on DB2, you could see some hiccups, but nothing that wouldn't be resolved within the immediate future."