Oracle, Siebel partnership collapses after Lane letter leaked

Computerworld has obtained a leaked letter in which Oracle preseident Ray Lane attacks and mocks its erstwhile partner, Siebel. The customer relationship management company has angrily ended its relationship with Oracle.

The partnership between database vendor Oracle and customer relationship management (CRM) company Siebel has collapsed in acrimony, with a Siebel executive accusing Oracle of setting out to destroy Siebel.

In a strongly worded letter to Oracle president Ray Lane, California-based Siebel vice-president of alliances Bruce Cleveland takes issue with Lane for allegedly telling Oracle staff that Siebel has been placed on a "most wanted" list and for boasting about the database vendor's strategy of confusing companies by calling them partners.

Cleveland says he came by the information through an email leaked by an Oracle employee, a copy of which he forwarded to Computerworld New Zealand.

He also accuses Oracle management of publicly declaring that its goal is to "attack", "wound" and "kill" Siebel. His letter was forwarded to 5000 Oracle partners and resellers around the world, including New Zealand.

Cleveland says that he has not received a reply from Lane and the relationship between the two companies is over.

"Although we have many customers who use the Oracle DBMS (database management system) as a result of Siebel recommending Oracle over other DBMSs from 1993 to 1998, we are no longer an Oracle partner and have established strategic relationships with Microsoft and IBM instead.

"We will continue to support our Oracle customers with new releases of Oracle. However, we are offering our existing and new customers the opportunity to switch to Microsoft SQL Server or IBM DB2 at a very attractive price."

Oracle in the US has declined to respond to the letter and Oracle's director of public relations Asia-Pacific, Raj Kumar, says there will be no formal response made to the press.

The letter, which starts out "Dear Ray", discusses how Oracle was happy to have Siebel as an Oracle Alliance Partner, when it was "a young growing company" because Siebel represented "valuable incremental database revenue", with many Siebel customers choosing to use Oracle databases.

"Our activities were wide ranging, including advertising in Oracle magazine, joint selling, joint customer service, technical cooperation, participation in trade shows and joint customer referrals."

However, now that Siebel has achieved some market success and Oracle has decided to compete in the same market, it appears that Oracle has soured of the relationship.

The letter goes on to say: "The message is clear: partnering with Oracle is possible only until Oracle covets your market. Then your company will become the target of a direct and all-out attack.

"Concern for the customer is irrelevant. Your closing comment in the enclosed email - that Oracle will be adding other companies, which it has lured in as partners, to its 'most wanted' list - is profoundly troubling."

In April Siebel announced an 81% increase in revenue for the first quarter of 1999, up from $US74.2 million in the first quarter of 1998 to $US134.1 million in the quarter that ended March 31.

Net income for Siebel showed an even higher jump of 119%, from $US9.7 million one year ago to $US21.3 million in the first quarter of 1999.

According to Siebel officials, revenue from software licence fees went up only 67% this quarter, but revenue from maintenance, consulting and other services increased by 124%, compared to the first quarter of 1999.

Meanwhile, in May Oracle launched an Internet-enabled version of Oracle CRM version 3i.

In New Zealand Siebel has about four sites, including Sequent Computers which uses Siebel CRM worldwide. Its closest office is the Asia-Pacific division based in Sydney.

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