Oracle has announced its acquisition of Telephony@Work (T@W) and will package its product line as the core of its “CRM on Demand” service that extends Siebel’s reach into mid-tier businesses. The new service is designed as a frontal assault on Microsoft by making the combination of intelligent routing, business analytics and interactive voice response easier to implement at a lower cost.

The acquisition marks a triumphant exit strategy for T@W which invented the category of the “virtual call center” in 1997 when it debuted “CallCenter@nywhere” as a suite of PC-based applications designed to replace PBXs as a method to distribute calls to multiple agents. There has always been a “too-good-to-be-true” quality to claims that a PC (and later an Internet browser-based solution) could take the place of all the elements of a modern contact center, including the ACD, IVR and multiple racks of applications servers to support CRM.

Over its nine-year existence, T@W had modest success with service provider partners, including MCI and Telus in North America and Telstra in Australia. With Oracle’s sales force (including the Siebel specialists) carrying a bogey for CRM on Demand, we expect to see broader acceptance of the solution.

Beyond Fusion Confusion
Oracle has some major challenges ahead as it digests a series of CRM and ERP software acquisitions, including Peoplesoft, Siebel and JD Edwards. Since January 2005 (when the acquisition of PeopleSoft closed), the company has single-handedly accelerated the software industry’s consolidation efforts by spending $20 billion on a broad range of solutions providers. These acquisitions spanned identity management (Oblix), database performance (TimesTen) and all manner of business verticals (Retek, ProfitLogic, i-Flex and others)

The T@W acquisition was closely tied to the $6 billion acquisition of Siebel that closed in January 2006. However, given the positioning of CallCenter@anywhere as the on-demand flavor of Siebel’s CRM suite, there will be interesting interdependencies with other recent acquisitions in the ability strengthen the “service delivery” fabric for next-generation communications service providers. Three highly relevant acquisitions by Oracle are:

— HotSIP: A specialist in Session Initiation Protocol (SIP) enabled applications over IP-telephony networks, including chat, messaging and conferencing.
— Net4Call (Acquired April 2006): Features software components that conform to the Parlay/Open Systems Architecture (OSA) standards designed to speed deployment of new applications
— Portal Software (Announced April 2006, transaction pending): A provider of billing, recordkeeping and “revenue management” capabilities required to bill for multiple services offered by telephony service providers on an on-demand basis.

A Stealthy Attack on Microsoft CRM
The T@W acquisition may make good on Oracle’s avowed intent to crush Salesforce.com. Nonetheless, it would be wrong to discount its more benign effect of bringing an affordable flavor of a high-quality CRM package to the marketplace in a way that is tightly coupled with contact center infrastructure. The new solution stack is direct competition for the marriage of Microsoft Speech Server 2007 and the software leviathan’s CRM offerings. It also stands to compete against the “Express” rendition of Cisco’s IP-Contact Center line which optionally ships with its Customer Voice Portal (CVP).

All of this is good news for medium-sized enterprises: They’ve already demonstrated demand for affordable CRM solutions and will now be able to avail themselves of nifty call-handling features without buying expensive or hard-to-maintain hardware components.

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