Siebel Shareholders To Vote On Deal

The special meeting is slated for 11 a.m. Pacific Time at a San Mateo, Calif., hotel near Siebel&'s headquarters. The proposed $5.85 billion deal has already been approved by regulatory agencies in the United States and Europe. Oracle, located just up the road in Redwood Shores, Calif., announced plans to buy Siebel in September. With the move, Oracle signaled its intention to keep expanding its business applications market share to bolster its flagship database business.

Siebel Systems, founded by Oracle alumnus Tom Siebel, pioneered the CRM segment. It was a high-flier at the start of the dot-com boom, but lost momentum when that bubble burst. It has since seen its market share under fire by less-pricey software from rivals ranging from Microsoft to PeopleSoft. A Siebel deal had been widely rumored for some time, but many thought Oracle had its hands full integrating the huge PeopleSoft acquisition it engineered two years earlier. Oracle paid more than $10 billion for PeopleSoft, as well as J.D. Edwards, which PeopleSoft acquired in the interim. Channel players are historically wary of Oracle because of its hard-charging direct sales focus. But one hosting partner that partnered with both Oracle and PeopleSoft before the merger said the combined company has become easier to work with.

Scott Jenkins, CEO of The EBS Group, an Oracle partner in Lenexa, Kansas, says the combined company has made great strides in this department and its referrals have gotten better. In between the PeopleSoft and Siebel deals, Oracle found the time and money to buy Oblix, Retek, OctetString and Thor Technologies. Though Oracle has led the league in databases, that business is under pressure from Microsoft and IBM. Oracle CEO Larry Ellison has said the industry will consolidate around a few key players in business applications, and he clearly aims to position Oracle to be one of the winners. With PeopleSoft, Oracle bought a lead in human-resource management software, and with Siebel it purchased a legacy installed base of CRM customers. In business applications, Oracle is waging war with market leader SAP. Microsoft is also attacking business applications with its newly renamed Dynamics ERP suite comprising the Axapta, Navision, Great Plains and Solomon lineups.

While Microsoft primarily targets smaller companies with its wares, most observers expect the Redmond, Wash.-based software giant to attack larger enterprises as well, even as Oracle and SAP try to move down into smaller businesses from their enterprise bases.