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Commentary: Free CRM software? Wait a second.

For enterprises focused on customer relationship management software, free could still be too expensive because of related costs and fees.

    By Michael Maoz and Ed Thompson, Gartner Analyst

    For enterprises focused on customer relationship management software, free could still be too expensive because of related costs and fees.

    Oracle's customer relationship management (CRM) software has been seeking to slow Siebel Systems' dynamic growth as well as demonstrate that Oracle is a thought leader in the CRM market. The announcement of OracleSalesOnline.com, a free online sales automation system that is a part of the Oracle E-Business Suite 11i, is a bold move in that no associated revenue stream exists for the next 12 months. (However, Oracle has given the software away for free in many recent deals.) This move could help Oracle jumpstart its application service provider business or seed potential Oracle BackOffice sales.

    See news story:
    Oracle giving it away to grab market share

    However, with this move, Oracle neither freezes the market nor stops Siebel. It also does not change the CRM market because to achieve a worthwhile CRM offering, such as integration with BackOffice, the offer is not free. Enterprises would have to absorb implementation costs directly from Oracle, as well as pay support costs, maintenance and fees.

    Smaller players offering similar commodity functionality, such as Salesforce.com and Upshot.com, will be challenged by this offer unless they have either a strong vertical industry or midsize enterprise focus. Companies such as Saratoga Systems, SalesLogix and Goldmine Software will be pressured in parts of their target markets.

    Entire contents, Copyright © 2000 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.