HP to sign mega deal with Salesforce, may dump Oracle Siebel: analyst

   on November 23 2010 12:00 PM
HP Headquarters
UBS Securities upgraded PC giant Hewlett-Packard to "buy" from "neutral," citing improving growth prospects for the majority of HP's segments through 2011. Reuters

PC giant Hewlett Packard (HPQ) is probably going to sign a mega customer relationship management (CRM) deal with Salesforce.com for about 35,000 to 40,000 seats, a move that might end up replacing Oracle Siebel as its CRM provider.

The development comes at a time when the relationship between Oracle and HP have soured following the public outcry of Oracle CEO Larry Ellison for HP’s sacking of his friend Mark Hurd as CEO. Hurd eventually joined Oracle.

The tensions between the two technology giants resurfaced in recent weeks, as Ellison tried unsuccessfully to get HP’s new CEO Leo Apotheker to testify in the Oracle-SAP TomorrowNow copyright infringement trial. Apotheker was the former Chief Executive of German business software maker SAP AG, Oracle’s arch rival.

HPQ is completely shutting down Oracle Siebel, which contacts tell us has made Oracle (ORCL) very furious. Contacts tell us that by moving to Salesforce, HPQ may be saving 40 percent - 50 percent over ORCL Siebel, Trip Chowdhry, an analyst at Global Equities Research said citing industry contacts.

Salesforce wants to close the deal with HP before its Dreamforce event, Chowdhry said referring to contacts. Dreamforce 2010, a cloud computing event by Salesforce, takes place between Dec. 6 and Dec. 9, in San Francisco.

Chowdhry said his contacts are almost 100 percent sure, if HP signs the mega deal of greater than 35,000 seats or so with Salesforce before the Dreamforce event, someone from HP will deliver the keynote at the event.

The analyst also said some of its contacts are hearing that HP's new CEO Leo Apothekar may show up at Salesforce's Dreamforce event.

If the deal happens, this would represent significant shift within the technology industry.

On the other hand, the analyst said Salesforce may feel confident that now is the time to move away from being under the shadow of Oracle, and Claim to the Enterprise World that Salesforce.com is the New Oracle; just like Google is the New Microsoft; and Microsoft is the New Xerox!

Both Oracle Siebel and Salesforce offers customer relationship management (CRM) software for businesses. The work of CRM involves focusing on service automated processes, information gathering and processing, integrating and automating various customer serving processes in a company. It also manages to keep track of customer preferences, buying habits, deals with service requests, information requests, complaints etc.

The key difference between Oracle Siebel and Salesforce solutions are Siebel is more sophisticated but complicated to use , where as Salesforce.com have better graphics, easier to train employees but not as comprehensive.

Oracle, which bought Siebel Systems in 2006 for $5.85 billion, currently offers about 50 CRM applications that are able to provide for all the customer service requirements of small, medium and large industries. Its solutions are more comprehensive, offers greater functionality and reliability.

Meanwhile, Salesforce allows a company to handle all their business applications with a single data model, one sharing model, and one user interface. It offers a shared enterprise application that provides for collaboration, reporting, data sharing etc.

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