Oracle continues the momentum for its CRM On Demand offering with sales organizations. Raising the limit of custom objects in Release 16 will offer greater extensibility to support more-complex requirements.

• Oracle continues to gain market momentum with new deals for Oracle CRM On Demand.
• Raising custom object limits will make Oracle CRM On Demand more extensible to support complex requirements for large enterprises.
• The Application Integration Architecture (AIA) platform lacks proof points, but customers are attracted to the vision.

• Companies considering software as a service (SaaS) for sales force automation globally or regionally should place Oracle on their shortlists.
• You should carefully evaluate whether your organization will need more than 50 custom objects for your first contract period; otherwise, you will pay a subscription premium for something you don't need.
• If you need high service uptime guarantees, then consider Oracle's $20 per month per user disaster recovery service.

Oracle continues to drive growth for its Oracle CRM On Demand product line. Gartner has seen contracts for more than 1,000 subscribers, and estimates that more than 125 deals for more than $100,000 in contract value closed during the past year. At the Oracle corporate level, Oracle CRM On Demand does not significantly affect the company's top-line revenue; however, Gartner estimates that Oracle CRM On Demand has broken through the 200,000 subscriber count, showing significant market adoption. Oracle's focus is on large enterprise accounts (more than 200 subscribers). However, Oracle will sell to smaller contracts, especially those that want to add subscribers for a separate geography to an already-deployed Siebel CRM on premise implementation. These mixed deployment environments are often needed when the targeted user base for Oracle CRM On Demand has specific needs separate from the Siebel CRM on premise deployment and that are not cost-efficiently offered by deploying another on-premises instance of Siebel CRM, or by adding users to existing instances of Siebel CRM on premise. In Oracle CRM On Demand Release 16, Oracle expanded its packaging and added enhancements in multiple areas.

Oracle has four editions for the Oracle CRM On Demand offering:

• Multi-Tenant Edition ($70 per user per month)
• Single-Tenant Edition ($90 per user per month)
• @customer Edition ($110 per user per month)
• Single Tenant Enterprise Edition ($125 per user per month)

The Multi-Tenant Edition has limited custom objects (50), and no ability to subscribe to Enterprise Disaster Recovery services. The Single-Tenant Edition offers dedicated infrastructure, but requires a customer to upgrade versions at the same time as the mutlitenant users. There is a perceived value of better security through data isolation (Gartner has not seen this as a major issue with multitenant SaaS deployments), but the value for a customer is the ability to upgrade to Enterprise Disaster Recovery, which the Multi-Tenant Edition does not allow customers to do. The @customer Edition requires customers to install the infrastructure on-site in their data centers. Although Oracle does remote release management of the application, there are gaps in disaster recovery, raising some concerns for clients. These concerns are discussed in more detail in the CRM On Demand Disaster Recovery section. The CRM Oracle On Demand Single Tenant Enterprise Edition is deployed on dedicated infrastructures. Two key features of this edition are a three-month release window for customers to upgrade to a new version and bundled Enterprise Disaster Recovery.

The key enhancement in Oracle CRM On Demand Release 16 is the increase in the number of custom objects that user organizations can leverage during deployment. Custom objects enable users to extend and group elements of the Oracle CRM On Demand data model. For example, a user can create a custom object for integration into a legacy system. The custom object would contain the appropriate data fields to map to the external system, with appropriate protocols enabling integration. A custom object could also represent functionality not offered in the base system to describe specific data important for a vertical industry.

Custom objects are paramount for supporting large enterprise needs, because they are often required to extend SaaS services capability to support more-complex requirements. Oracle had a limit of three custom objects per organization. This limitation made it difficult to extend the system for complex requirements. In Release 16 of Oracle CRM On Demand, there is an imposed limit of 50 custom objects on the multitenant version (list price $70 per user per month), and no limit on their single-tenant version ($125 per user per month). User organizations should investigate the need for going over 50 custom objects during the design phase, because the premium is substantial to move to the single-tenant version. Most organizations will not run into limits. Large enterprises with complex requirements and multiple integration points are more likely to run into the limit.

Among the usability enhancements are:

• Improved searching and column displays, taken from user feedback
• Increased flexibility for forecasting, enabling users to forecast based on units, not just on revenue
• Fiscal quarters that start at times other than the first day of the month

Oracle has continued to focus on analytics by adding a multicurrency dashboard, and more historical analysis areas, such as accounts and competitors, opportunity and competitors. Another enhancement in this latest release is support for eight other languages (Danish, Dutch, Finnish, Polish, Russian, Swedish, Thai and Traditional Chinese). The most important functional enhancements, other than the custom objects, are Oracle CRM On Demand Deal Management, Oracle CRM On Demand for Partner Relationship Management (PRM), AIA Integration: CRM On Demand for JD Edwards, and CRM On Demand Disaster Recovery.

The strategy of offering prebuilt integration to JD Edwards makes sense, because most of the JD Edwards installed base will be attracted to a SaaS sales force automation offering due to their midmarket size and lack of a compelling on-premises offering for JD Edwards (dropped from the Gartner Magic Quadrant for Sales Force Automation in 2008). However, AIA has not been the primary method that Oracle CRM On Demand customers have used to integrate with other Oracle applications.

The majority of references with whom Gartner has spoken that use Oracle CRM On Demand have not yet leveraged AIA for integration with other Oracle applications, where prebuilt integrations have been available for more than one year. Customers stated that early versions of the AIA integration had issues with installation and configuration tools. Oracle states that 11 customers are live with CRM On Demand AIA integration and Siebel. Gartner continues to see the preferred method of integration using Web services outside the AIA framework. Gartner expects more usage of AIA as post-Web 2.0 versions.

Sales and implementations of large-scale PRM have struggled in industries outside high technology. Oracle has a history with PRM dating back to Siebel's Partner Relationship Solution and the Oracle E-Business Suite (EBS) PRM offering. There has been an uptick in SaaS PRM deployments, primarily from salesforce.com. Therefore, it made sense for Oracle to move in this direction and challenge salesforce.com. With Oracle CRM On Demand for PRM, Oracle offers capabilities in three core areas: the partner management channel, go-to-market and channel sales execution.

The partner management capabilities support the channel manager's role for growing and managing a network of partners. Partner management core elements — such as partner recruiting, registration, partner profiling, training and certification, and partner performance tracking — are part of the application. The go-to-market capabilities — such as partner program planning, market development funds, campaign and event management, promotion planning and partner content — help the channel manager motivate the company's channel partners and generate deals in this area.

The sales channel execution elements help customers execute their channel plans. Capabilities such as lead distribution, registration, joint opportunity management, forecasting, quoting and pricing authorizations, and channel order management help companies meet this challenge. Additionally, Oracle is integrating other aspects of PRM dynamics, such as integration, into social networks. However, Oracle will face the challenge of trying to prevent the cannibalization of its on-premises software sales and installed base of Oracle PRM and Oracle Siebel PRM solutions, especially if it delivers business value, and eases PRM implementation issues. Because the offering is new, there are no data points that Gartner has validated for production references. Therefore, organizations will need to conduct a thorough evaluation (for example, feature/function, business process support, integration) of the fit between On Demand for PRM and the organization’s technology portfolio and objectives.

Oracle has improved its CRM On Demand value proposition through support for the Enterprise Disaster Recovery Option (EDRO), a no-cost service option for Enterprise Single-Tenant Edition customers, priced at $20 per user for Standard Single-Tenant Edition and @customer Edition. EDRO, announced earlier this year, supports specific recovery service-level guarantees: a recovery-point objective (RPO) service level of one hour, and a recovery-time objective (RTO) service level of 24 hours. The one-hour RPO service level, supported using the vendor's Data Guard software, is noteworthy because, generally, vendors have not offered RPO-based service-level guarantees, whether for disaster recovery, hosting or SaaS.

EDRO subscribers have the option of conducting joint recovery exercises with Oracle on a once-a-year basis. Conducting this level of exercise is recommended, because it's important that CRM On Demand customers ensure that the recovery service levels that are committed by Oracle are the same service levels that can be delivered.

Although the incremental cost per subscriber for the Standard Single-Tenant Edition and the @customer Edition are the same ($20), the service delivery models are completely different. In the case of Standard Single-Tenant Edition, all application and data recoveries occur between the Oracle-managed primary and recovery data centers. However, since the @customer Edition operates on customer-provided equipment located in a customer-provided data center, the customer is also required to provide the recovery data center, infrastructure hardware and supporting software. When a secondary data center is not in place, application and database recoveries can only occur in the primary data center, thereby making the primary data center a single point of failure.

Oracle CRM On Demand Deal Management was introduced in September 2008 at the Oracle OpenWorld 2008 conference and was for sale with Oracle CRM On Demand Release 16 in January 2009. This is a stand-alone, add-on module representing an initial effort at exposing pricing data via a Web browser to salespeople to help them evaluate deals. It will be priced at $20 per user, per month. Provided functionality includes support for pricing reviews, customer histories, comparisons with similar opportunities, basic what-if analysis on price points and margins, and common charting capabilities (such as scatter diagrams). Browser access from smartphones (such as the iPhone or BlackBerry Storm) is not currently supported.

The initial version should be considered a worthwhile version for testing new approaches to assisting key sales activities, because most firms are unsure how best to deliver deal management capabilities directly to salespeople. Deal management applications are typically implemented for price practitioners within price desks, deal desks or bid response teams that are accustomed to working with substantial data sets and sophisticated analytic tools. Oracle clients committed to aggressive adoption of Oracle CRM On Demand functionality should explore limited pilots to test the value of deal management capabilities.

Oracle offers multiple industry solutions, such as insurance, wealth management and life sciences. However, new customer evaluations and references with whom Gartner has checked stated they were using Oracle CRM On Demand for its cross-industry capabilities, not for its unique vertical industry capabilities. There is no incremental price for the vertical industry solutions, therefore, customers in those segments do not have to pay extra to try the vertical industry solution.

Oracle customers cited that there is room for improvement beyond Release 16. One area was territory management and realignment. Specifically, they noted the lack of a parent-child relationship among account, leads and activities. Users stated that if you move an account to another territory, you have to individually move leads and activities separately. Many users said there was the need to improve workflow, and that Oracle needs to have better coverage of "triggers." Triggers are currently based only on data changes, not new data entry. Users also stated they had to manually redo changes in production that they had made in the development or staging environments, and that there was a lack of governance tools to manage the changes.