by Ephraim. Schwartz

Oracle acquisition of Siebel is not good news for Salesforce.com

news
Sep 12, 20052 mins

Marc Benioff’s ambitious plans to make Salesforce a platform for the integration of all enterprise applications is not going to happen, at least not in the enterprise. Today news that Oracle will acquire Siebel is a stunning example of why it won’t.

Salesforce.com announced today AppExchange, a technology or platform if you will, that allows its customers to incorporate third party Web services and Web service-based applications into the Salesforce.com architecture.

While it sounds like Benioff is on the cutting edge with an SOA-like solution, I am afraid this is not a solution that the enterprise is looking for.

True, Salesforce.com has been growing and winning more enterprise-level customers for its on demand CRM solution. But I’m afraid its growth stops there.

AppExchange is counter-intuitive to everything that is happening in the market.

The Oracle acquisition is not a mere reflection of Larry Ellison’s desire to be king of the hill. It is also a reflection of the desire on the part of large companies to reduce the amount of applications and networks they need to support.

Instead of one throat to choke, one stack to manage, Marc Benioff would have us believe, that large companies want to go out and link dozens of smaller applications, some of them untried and untested, together.

And if you think that sort of sounds like the SOA paradigm you would be right. Taking components from here and there and linking them together is what componentization is all about.

But I tell you this idea runs completely counter to the real world where companies are trying mightily to jettison point solutions and the number of applications they need to manage and support in favor of a single solution from the likes of Oracle, SAP or Microsoft.

Salesforce.com and AppExchange may be right for SMBs in the short run, but even the M in SMBs are looking for and often need the same solutions that the enterprise needs.

The line between what a medium-sized, $1 billion company needs and an enterprise-sized $2 billion needs are mighty thin.

Salesforce.com needs to refocus its attention on smaller companies or slowly but surely its growth will stop and then atrophy.