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Home > Oracle Database / Applications News > Siebel to take on all comers in 2005 |
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It wasn't that long ago that if you were a CRM vendor, Siebel Systems Inc. was the company you'd want to be. With big customers and partners alike – and with friends like IBM and HP -- Siebel was the acknowledged market leader in CRM. And it kept piling on new functionality in its software. And while most still consider Siebel to be the market leader, it's no longer in such an enviable position. "Unfortunately, the market is theirs to lose," said Mary Wardley, analyst with Framingham, Mass.-based IDC. "I feel bad for them. They're sort of sitting ducks with everyone surrounding them." Everyone means Germany's SAP AG and Redwood Shores, Calif.-based Oracle Corp., applying pressure from the enterprise market, and Salesforce.com and Microsoft from the small and midmarket. How vast is the SMB functionality gap? Siebel has made its move on small and midsized businesses (SMBs) with its hosted offering OnDemand, and it has clearly targeted San Francisco's Salesforce.com. At the end of last year, Siebel announced a new strategy to capture the SMB market, complete with a new channel program and inside salesforce that will serve small businesses. "The number of companies in that category is a huge number," said David Schmaier, executive vice president. "We see that market as highly fragmented. We plan to consolidate that as we did in the enterprise and midmarket. We think that's a nice net addition."
Siebel received some good news in that regard last week when Joe Galvin, an analyst with Stamford, Conn.-based Gartner Inc., issued a note saying that Siebel had closed key functionality gaps with Salesforce.com with its version 6 release. Galvin wrote that Siebel's new vertical offerings give Siebel an advantage. That verdict is not unanimous, however. Laura Preslan, an analyst with Boston-based AMR Research Inc., said Siebel's go-to-market strategy for SMBs is flawed because it doesn't have the functionality of Salesforce.com and, to an extent, Microsoft CRM, nor does it have the hosting experience. While building channel partners is the right approach, it will take three years before this strategy pays off, and Siebel will find it difficult to stay the course with a low-margin, high-cost business, Preslan said. Siebel also will face competition on the enterprise end of the market from SAP, which some have already said will take over the CRM market lead, and from Oracle, which just announced plans to integrate its applications with those of recently acquired PeopleSoft. Leave the back office to SAP, Oracle Yet Oracle's acquisition and integration is going to prove a distraction and, will at a minimum, turn out to have a neutral effect if not a very positive one for Siebel, Schmaier said. "Oracle and SAP are fighting for the back office," Schmaier said. "We see that as played out. The front office is where the budget is going in 2005." Wardley isn't so sure Siebel has the front office to itself. In fact, SAP is positioning itself there and has significantly increased its share, she said. Moving into 2005, Siebel will focus on consolidating the front office, Schmaier said. For example, it will integrate self-service technology and billing capabilities with technology from recently acquired Edocs. Kevin Laracey, the former CEO of Edocs, will take over Siebel's self-service development. Other leadership additions include Bruce Cleveland, who has taken over the SMB unit; Reid Drucker, a former partner with Accenture who is taking over the telcom and media division; and Les Rechan, who is taking over manufacturing and distribution team. "You can expect to see more senior leadership additions in the global leadership team," Schmaier said. Also expect Siebel to continue to advance its business intelligence capabilities into CRM, as it capitalizes on the trend toward what it calls "insight-driven CRM," Schmaier said. Preslan agrees that Siebel Business Analytics will continue to gain traction and in five years the company will become an analytics vendor that provides CRM rather than the other way around. Finally, expect Siebel to be an acquirer in the coming year rather than becoming acquired, Schmaier said. Future acquisitions will be more along the lines of Edocs or Eontech, recent purchases that advanced Siebel's vertical strength.
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