Oracle?s new alliance with consultancy KPMG Peat Marwick to market front office applications has raised fears that the database supplier may be embarking on a strategy of competing with its technology partners.
Such a move follows heavy criticism several years ago that the company?s applications division was little more than a consultancy, which happened to sell packaged software, and that it was attempting to take on its consultancy and systems integrator (SI) partners.
Ian Valentine, who works for call centre specialists and Oracle partner, Graham Technology, said he was afraid that Oracle was starting to move into applications areas where it had formerly relied on partnerships to supply it with products.
As a result, he claimed, businesses such as his were starting to view Oracle as a competitor rather than partner.
Oracle, which acquired Versatility last year (see VNU Newswire, 24 August, 1998) to provide it with much needed computer telephony integration (CTI) and call centre technology, is now developing its own front office applications despite having ongoing relationships with Vantive and Siebel.
Valentine said: "The sales guys are so pumped up with Versatility, they haven?t worked out that customers want a much higher level of functionality."
But according to Jim Holincheck, an analyst at Giga, Oracle?s partnering strategy means it has been unable to grow application license sales as quickly as its competitors.
"I think Oracle is a good example of where this kind of thinking has hurt the vendor. Oracle might have grown more if it had cultivated better relationships with SIs instead of competing with them. SIs want to sell solutions, but they do not necessarily care which ERP vendor provides the underlying technologies," he said.
Today, Oracle has realigned its consultancy division to concentrate on deals it believes will not bring it up directly against its consultancy and SI partners.
But while Peter Dunning, Oracle?s senior vice president of worldwide applications and a former SAP executive, was aware of the need to protect consultancy partnerships, he appeared ambivalent towards the company?s technology partners.
On the one hand, Oracle has to treat consultancy partners like customers, he said, but with respect to the firm?s technology strategy, he added: "All our partners know we could claim a space, but unlike other suppliers, we don?t bleed them dry and then drop them. Front office is strong on call centre, sales and marketing and will be rounded out with more on the automation side in the next release."
Graham?s Valentine was unimpressed, however. "Businesses want to develop on the basis of business processes. This means shielding the business user from as much coding as possible. But trying to get Oracle?s attention is nigh on impossible," he said.
Since Oracle has refocused its consultancy effort, it has enjoyed something of a renaissance in the applications market, but with marketing spend currently focusing on front office applications, it may be picking the wrong market with the wrong approach.
Terry Wilcox, managing director of Skilnet, an Internet based customer relationship management software vendor, said: "Sales force automation is not what sales people want. They see it as Big Brother and will work around it. You have to offer something that provides genuine business value beyond sales."
It will be interesting to see how Oracle responds.
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