Oracle turns on its allies

Leaked memo reveals attack on Siebel and Ariba.

Oracle is cutting jobs and targeting its key partners' business as part of a sales strategy rethink, which includes a stronger focus on customer relationship management (CRM) products.

The US vendor has made 30 of its 4,500 UK staff 'provisionally redundant', on top of 325 job losses announced in the US last month.

People close to the company predict further cuts in the next four weeks.

Oracle declined to comment on layoff plans. 'No company can do that. Who knows what will happen tomorrow?' a spokeswoman said.

Last month, Oracle chief executive Larry Ellison camped out at the firm's City of London office to cut duplicated functions within its European operation.

Ellison has vowed to overtake SAP in enterprise resource planning (ERP) software. But according to figures from investment bank Goldman Sachs, the German vendor took 55% of the market last year. PeopleSoft and Oracle shared second place with 14% each.

'We didn't do quite so well on ERP, so we're cutting out a bit of fat and redeploying quality guys to key markets like CRM,' said Chris Grant, Oracle UK's director of alliances.

Chief operating officer Ray Lane emailed staff a warning to target CRM firm Siebel and Ariba, a purchasing software specialist. Both are officially Oracle partners, but Lane said the companies are 'two that I would like to put on the "most wanted" list'.

In a mail marked 'Do not forward outside the company', Lane added: 'These two companies are as much competitors to Oracle as PeopleSoft and SAP, if not more, given the importance of these markets.'

Siebel's vice president of alliances, Bruce Cleveland, has written to Lane, describing the leaked email as 'profoundly troubling'.

Ovum analyst Cassandra Millhouse said that Oracle's CRM software is difficult to use, calling it as 'user vicious'. Ovum rates Oracle below established CRM players Siebel, Vantive and Clarify.

Steven Mathieson co-wrote this article.