Oracle has been losing CRM marketshare to Salesforce in recent years, which sheds light on its recent acquisition of knowledge management provider Inquira. But, as John Ragsdale writes, Oracle’s move may be too little, too late as service firms have largely adopted competing solutions that integrate easily. Republished with permission from Ragsdale’s Eye on Service.

I suppose my nose is out of joint because I found out Oracle acquired InQuira, a leading knowledge management and search vendor, by reading about it recently in the San Jose Mercury News. If you want any indication of how this acquisition will fare for InQuira and its customers, the fact that I didn’t even get a courtesy call or email – and I do more knowledge management inquiries from technology buyers than just about any analyst in the world – and that the analysts quoted in the press releases were the usual Oracle ERP analysts who don’t know anything about CRM or knowledge management tells me this IP won’t be available as a standalone for long.

I remember asking Oracle many years ago – probably 2002 or 2003 – why they continued to partner for knowledge management instead of acquiring or building their own solution, and their answer was blunt but truthful: “We’ve never lost a CRM deal by not having embedded KM.” Obviously, that’s not the case anymore.

Not only has Oracle lost tremendous marketshare of CRM to, but Salesforce has also started raising their visibility for knowledge management.  Here’s some data:

Back in 2006 – the first year I did the annual Member Technology Survey –Siebel/Oracle/PeopleSoft dominated the market, with 33 percent of high tech companies using their CRM platforms. But oh, have times have changed. By 2011, Salesforce increased their ownership share to 46 percent, while Oracle’s has dropped to 14 percent. Of course, the average deal size for Salesforce’s OnDemand CRM products is dramatically lower than Oracle or Siebel’s on-premise tools, so the overall CRM industry has shrunken by millions of dollars over this period as well.

But Salesforce hasn’t just been working on building their CRM marketshare. Check out these adoption numbers for knowledge management tools from the 2011 survey:

Fourteen percent of members are using Salesforce’s increasingly sophisticated knowledge management tools, thanks to Salesforce investing in knowledge management technology such as the 2008 acquisition of Instranet. So it appears that knowledge management is playing a role in CRM purchases.

Oracle says InQuira will be leveraged in the release of Fusion applications, but now that Fusion is six years late to the market, I don’t think anyone is still holding their breath waiting for the apps to come to light. And unless they have completely revolutionized the way CRM works, even if the product is launched I don’t know if they can overcome their extended years of inertia.  They also have tremendous internal problems to overcome, which I am no longer convinced is even possible. The Oracle application sales teams have become so siloed that recently, when a company using Oracle’s JDEdwards for CRM wanted to add on field service from Siebel or Oracle, their sales rep refused to even demo it for them, told them the two products could never integrate, and they could buy JDEdwards field service (which is thin, to say the least) or do without.

Those sorts of brand conflicts within a company show how much trouble can arise from buying multiple CRM suites and never doing any integration or consolidation work. The amount of squandered potential and good will is hard to recover from.

To read the original article, go to Ragsdale’s Eye on Service.

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ABOUT John Ragsdale

Avatar photoJohn Ragsdale is vice president of technology and social research for the Technology Services Industry Association. He writes a regular blog, Eye on Service, for the TSIA.