Tuesday, August 17, 2010

Why IBM is going to acquire Unica? or Unica's uniqueness

Unlike the other three leading Eco Systems vendors Microsoft, Oracle and SAP, IBM is not a player in the applications market. Its absence from this market is based on strategy which does not include ERP, CRM and other applications as one of its target markets.

In order to answer this question I am going to describe the first time the name Unica was mentioned to me.
It was a strategic CRM consulting project I was participating in. The large customer was using Siebel. I joined a CRM expert with vast knowledge and experience of the customer's  implementation as well as other CRM projects. My role was to analyze the CRM market and its trends focusing on implications relevant to that client. I choose to focus on Siebel and the other three market leaders of that time: SAP, Oracle and PeopleSoft and two other unique products which may supplement them (Unica and Kana). Two days before we gave the client our report Oracle announced Siebel acquisition and my role in the project became more important than planned. I had to answer the key question: will Oracle continue to develop Siebel or will another CRM product (Oracle CRM or PeopleSoft CRM) will be the strategic product?
In case of the conclusion that Oracle acquired it only for market share the customer would have considered of replacing it by SAP CRM. 
My First Take analysis provides the right conclusion: Siebel is going to be Oracle's leading CRM product.
As far as Unica is concerned, its uniqueness was in Campaign Management and in unifying the Operational CRM and the Analytical CRM parts of its Campaign Management offering.

As part of my work in the same consulting project, I also learned something new to me about Siebel by reading a Datamation report: Siebel defined itself as a Business Intelligence (BI) vendor in addition to defining itself as a leading CRM vendor. Its BI solutions were not limited to the context of Analytic CRM.

So, why IBM is acquiring Unica?
It is because of the analytic capabilities of Unica products. IBM, and it is not the only one, predicts that extensive usage of more sophisticated and smarter BI and Analytic tools is a must for most enterprises. The BI and Analytic markets are target markets for IBM. It already acquired companies like SPSS (Statistical and Analytical vendor) Cognos (BI market leader). These tools, as well as Unica tools, can be used together with other IBM's infrastructure products such as DB2 database for Operational and Data Warehouse systems, various IBM's BPM and BAM solutions, DataStage ETL product and others.
IBM's challenge is similar to challenges the company faced in other topics such as SOA and Integration: building a comprehensive solution from the acquired and in house developed products. 


Richie said...

Hi Avi,

Nice write-up. I stumbled upon it, because we are a Siebel customer, now going to Unica for e-Marketing Automation.

First off, we feel kinda screwed by Oracle regarding Siebel. Yes Siebel is (was?) their flagship CRM product. But now its all Fusion CRM...

Problem is they don't have an upgrade path for customers - we've got millions of $ invested in Siebel customization, and current indications are we are going to have to redo them if we wanted to go to Fusion CRM (next-generation?).

Staying with Siebel is not an option longer-term because it's not Web2.0 and usability is poor. and Oracle has no plans to revamp the Siebel architecture, to make it Web2.0 friendly (as far as I know).

Unica on the other hand seems more usable (although used for different functionalities by us).


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