Oracle-Salesforce.com Announcement Will Have Little Impact on Sales Application Decision Makers

21 August 2013 ID:G00255723
Analyst(s): Robert P. Desisto

VIEW SUMMARY

The much-hyped announcement of a partnership between Oracle and salesforce.com was low on substance and will have little impact on sales application decision makers.

Overview

Impacts

  • The Oracle and salesforce.com announcement will not impact sales application decision makers evaluating each vendor for sales force automation.
  • The Oracle and salesforce.com announcement will not impact current salesforce.com Sales Cloud users who are considering Oracle Sales Cloud for territory or incentive compensation management.

Recommendations

  • Continue to evaluate Oracle Sales Cloud and salesforce.com Sales Cloud in the same manner as you would before the Oracle-salesforce.com announcement.
  • Do not assume any advantages to integration between Oracle Sales Cloud and salesforce.com Sales Cloud until more product plans and technical commitments are made available.

Analysis

On 22 July, Oracle and salesforce.com announced they will work together to build new integrations between salesforce.com Sales Cloud and Oracle HCM Cloud, Oracle ERP Cloud, and Oracle Sales Cloud (territory management and incentive compensation management). Gartner determined early that this announcement will not impact sales application decisions around each product. However, Gartner has received numerous inquiries from user organizations wanting to understand the impact of the announcement. Based on customer concerns, Gartner wanted to formally address the announcement.

As expected, each vendor has spun the announcement to its favor. Gartner has heard from numerous customers that Oracle says this was about a salesforce.com contract renewal for its database technology, and this provides validation of Oracle enabling the cloud. Salesforce.com salespeople are stating that this is proof that Oracle is exiting the sales application business. Ironically, Gartner has not heard any customer say that either salesforce.com or Oracle is selling the "planned integration" benefits. The most tangible piece of the announcement has little impact on customers: Salesforce.com will continue to commit to use Oracle Database technology, something salesforce.com has been doing for over 14 years. In addition, salesforce.com states it plans to standardize on the Oracle Linux operating system and Exadata engineered systems; however, few details were presented on when and how. There were other interesting factoids mentioned in the announcement itself, as well as the interviews after, such as the fact that Oracle is using salesforce.com in its sales organization. However, this is only because Oracle has made acquisitions where the acquired vendor was already a salesforce.com user. There were mentions of Oracle Cloud Human Capital Management (HCM) and Oracle Cloud ERP integrations, but this research is specifically focused on the impact of the announcement on sales application decision makers, not HCM organizations.

Figure 1. Impacts and Top Recommendations for the Oracle-Salesforce.com Announcement
Figure 1.Impacts and Top Recommendations for the Oracle-Salesforce.com Announcement

Source: Gartner (August 2013)

Impacts and Recommendations

The Oracle and salesforce.com announcement will not impact sales application decision makers evaluating each vendor for sales force automation

After the announcement, there were rampant questions from customers. Questions included: "Is Oracle pulling out of the CRM market?," "Will Oracle salespeople sell salesforce.com?" and "Is this the first step in Oracle buying salesforce.com?" The facts that emerged in the days following the announcement are more telling. In multiple sales force automation evaluations Gartner was involved in, it was very clear each vendor sought to downplay the significance of the announcement. The general theme in those situations was that the announcement was more about salesforce.com getting a new Oracle technology deal, rather than any of the so-called prebuilt integrations. As expected, salesforce.com salespeople don't mind tapping into the first question on Oracle leaving the market, but there is no fact base to support it.

The more interesting part of the announcement was what was left out. Nowhere in the announcement were there any commitments on integration with Oracle E-Business Suite. This is the top priority of CRM decision makers who lean toward selecting Oracle Sales Cloud. If Oracle at least stated that E-Business Suite integration was a major focus of the partnership with salesforce.com, then the impact could have been measurably more in salesforce.com's favor. Gartner has not seen any specific product integration plans between the two companies.

Recommendation:

  • Sales application decision makers should continue to evaluate Oracle Sales Cloud and salesforce.com Sales Cloud as if the announcement did not exist.

The Oracle and salesforce.com announcement will not impact current salesforce.com Sales Cloud users who are considering Oracle Sales Cloud for territory or incentive compensation management

Another component of the joint announcement was the integration of Oracle Sales Cloud territory, incentive compensation and human capital management with salesforce.com Sales Cloud. One of the key areas of investment for Oracle Sales Cloud has been in sales territory and incentive compensation management. Oracle's territory management leverages analytics, which users have stated helps during the planning process. A user can use salesforce.com to manage territories, but salesforce.com does not use the same analytic approach of Oracle. Salesforce.com does not offer incentive compensation, but has partners, such as Xactly, who have integrated with it on its partner ecosystem, AppExchange. In theory, if customers were implementing Oracle HCM Cloud and were also salesforce.com customers, they could receive some benefit implementing Oracle Sales Cloud territory and incentive management. However, the benefit is more from integrating Oracle HCM with Oracle Sales Cloud than with salesforce.com, as there is a close tie between sales territory definitions and organization data models in Oracle HCM. There could be a benefit in taking the same territories and passing them to salesforce.com Sales Cloud, but, at this point, Gartner has not seen specific product plans integrating Oracle Sales Cloud and salesforce.com.

Recommendation:

  • Sales application decision makers should continue to evaluate Oracle Sales Cloud territory and incentive compensation management with the same criteria and assumptions used before the Oracle-salesforce.com announcement.

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