Jan 26, 2009 (11:01 AM EST)
Oracle Takes On Salesforce.com With CRM On Demand Upgrade

Read the Original Article at InformationWeek

Oracle is hoping to challenge Salesforce.com's lead in the realm of CRM software-as-a-service products.

Oracle is expected Tuesday to unveil its CRM On Demand Release 16. The software was designed to offer customers more flexibility in deployment and maintenance than what's typical of the traditional SaaS model.

With the new release, Oracle hopes to demonstrate that it can offer companies more options in SaaS CRM than marketplace leader Salesforce, which abides by the multitenant model.

Oracle has offered both a multitenant version of CRM, in which customers share servers and software, for $70 a month per user, and a single-tenant version, in which customers rent their own hardware and software and can control maintenance upgrades, for $125 a month.

With Release 16, Oracle is adding yet another option: a single-tenant standard edition, in which companies pay a monthly fee to rent their own, nonshared systems, yet must abide by Oracle's CRM On Demand schedule for maintenance and upgrades, priced at $90 a user per month. A fourth option lets customers run CRM On Demand on systems located at their own offices for $110 a month per user.

Also with Release 16, Oracle has opened up customization options and said customers can now configure as many custom objects as they like for such things as data analysis, fields customization, and data integration; previously, customers were limited to three custom objects per system.

Oracle develops pre-built objects for specific industries but had limited custom object development since it assumed most users wanted an "out-of-the-box" SaaS experience, senior VP Anthony Lye said in an interview. Oracle still offers pre-built objects, but has found that customers want more options in customization, he said.

These changes to CRM On Demand, which are made twice yearly, emphasize Oracle's philosophy that SaaS can be an animal of many shapes and forms, depending on customer preferences. As Oracle's SaaS strategy evolves, it's decided to "listen to customer requirements more than dictate them," Lye said.

For example, some companies may insist on their own hardware and software and have no problem abiding with Oracle's maintenance schedule, and would choose the $90-per-month option. However, a company that wants to dictate maintenance so it can avoid any changes during a transaction-heavy time period -- say, the open-enrollment period for a health insurance provider -- and also have its own software and hardware may opt for the $120-per-month choice.

Lye said that within the past few years, Oracle has developed application and database "pods" of both multitenant and single-tenant CRM On Demand systems in its data centers, so that if one pod fails, other customers aren't impacted.

The result, Lye said, is that you'll never see a worldwide outage that affects every CRM On Demand customer. And customers that want hosted CRM but don't want to share with others can have their own exclusive pod.

With the multi-/single-tenant approach, "what Larry [Ellison] has created is sort of a Hertz business, where we have a whole fleet of vehicles," explained Lye. "Some are buses, some are hyperperformance vehicles, and some offer fuel economy. What Marc [Benioff, Salesforce's CEO] has is a big mainframe."

In any case, all of Oracle's CRM On Demand options avoid the traditional -- and increasingly controversial -- software license and maintenance model, which InformationWeek examines in our cover story this week. Oracle president Charles Phillips emphasized to InformationWeek in a recent interview that Oracle supports both the traditional model and the SaaS model for all of its customers.