Lots of buzz around the second mega acquisition of the day ($5.8B), seeing Oracle eating up Siebel Systems for dessert. Given that the company has about $2.2B cash on hand, Oracle is paying $3.6B, i.e about 2.7X Siebel’s trailing revenues.
The best quote about the deal comes from… SalesForce.com’s Marc Benioff (who worked at Oracle, and made $25M or so as an early stage investor in Siebel if memory serves me right) in his note to employees:
Oracle put Siebel investors out of their misery today. We have been doing that for Siebel customers for years. Our announcement today at Dreamforce will accelerate that. It’s the end of software. Client/Server software is being consolidated by Oracle just as mainframe software was consolidated by Computer Associates. Oracle’s strategy is simple, instead of innovating, buy as much installed software as possible, call it all Oracle Fusion, and make sure it all uses Oracle’s database.
Now, the same thing that happened to Peoplesoft will happen to Siebel, it will die. Customers will look for new solutions and new providers. Employees will look for new employers. Siebel on Demand, a joint venture between Siebel and IBM, will be the first to be buried. Siebel on Demand is written exclusively on DB2 and Websphere and runs in IBM data centers. Oracle will kill it. Oracle does not sell DB2.
Now, the opportunity to be the global leader in the CRM market has opened for salesforce.com. Our dream is becoming a reality as the world will move to new on demand solutions. Already the fastest growing public CRM company in the world, with over 50% market share in On Demand CRM, salesforce.com is well poised to become the world’s new global CRM leader.
It is auspicious that this is the very day that we are announcing our new strategy at Dreamforce with AppExchange (www.appexchange.com) and our Winter ’06 release.
At this pace, exiting enterprise software companies in a couple of years will mean flipping a coin: SAP on one side, Oracle on the other. Dana Gardner says the same thing (albeit much more eloquently) in his piece “Consolidation shifts power on infrastructure choices”.
Now that Amdocs is the only one left in the enterprise suite CRM market, what’s next ? CRM Analytics ? SFA ? Mid-market CRM ? Another way of looking at it: which other key companies are led by ex-Oracle executives ?
PS: check the comment below, and you’ll see what Jurvie is laying out as "the next billion dollar acquisition for DFJ".