Salesforce vs. Siebel faceoff: Salesforce inventing CRM's future

In this Salesforce vs. Siebel faceoff, one analyst argues that Salesforce is inventing the future, while Siebel is trying to get into it.

This is one side of a Salesforce vs. Siebel debate. The other side argues that Oracle Siebel is a more established, more versatile product.

Coke or Pepsi? Ford or Chevy? Betty or Veronica? Siebel or Salesforce? If only it was that easy. Truth be told, I have done consulting work for each company in my career and have been impressed with the products, the people at both companies (they tend to migrate) and the seriousness that they apply to their missions as customer relationship management vendors.

Denis PombriantDenis Pombriant

Perhaps the best way to understand the comparison is not to start with functionality but with the markets each company serves. The markets look similar but are vastly different. Both companies court sales in small, medium and enterprise spaces. Because Siebel has been around longer, it became the early standard in the client-server era, and the company has worked for many years to upgrade from that platform to something more social and mobile.

On the other hand, Salesforce.com practically invented cloud computing -- it certainly marketed it into existence. So Salesforce has a more modern infrastructure, especially given the multi-tenant back end.

These facts determine the kinds of customers each company attracts, and they drive long-term decisions about product evolution. Siebel (and I mean Oracle) has an older customer base and a more conservative one too. The Siebel customer is more likely to have started life in client-server and moved one upgrade at a time to a browser interface.

Today, each company has customers up and down the ladder, but Siebel is the one that tries to move customers into the future of computing, while Salesforce is the product already there and, to be fair, is inventing a lot of that future.

Siebel is the older solution, and its customers have dug in deeply, installing, tuning, using and maintaining their implementations in many cases for more than a decade. The talk at Siebel quickly gets into the bits and bytes of schema, performance tuning and other geeky topics. Customers are insulated from much of that in the Salesforce world and the perception is that Salesforce is easier to use.

Salesforce is the solution that companies access from the cloud, pay for by the drip and manage. Unless a Salesforce user is into the procedural logic of the applications (or is building one from scratch), he or she will encounter the front end of the Salesforce application and probably not much else.

Both companies offer social and mobile products that are quite good. But the impression I get is that Siebel is trying to apply social to its applications and business practices, while Salesforce has already embedded it. That is a big difference and it goes directly to the platform underpinnings. Siebel has the Oracle Fusion platform for development and, over time, the applications suite will be completely rewritten in Fusion. Kudos to Oracle for making Fusion an optional approach for now, which gives users plenty of time to equilibrate. However, there is also some concern over Fusion's fitness, but that will diminish with a few well-publicized successes.

Salesforce has, almost from the beginning, exposed its platform and API for customization and de novo development and, as a result, it has north of 1,700 partner applications sharing the same schema, tools, social infrastructure and login. So, to net out the situation, Siebel is built on the premise that the customer will have a significant IT staff to keep it running and to continue servicing the many customizations each user makes.

Salesforce is, at least in some ways, more standardized and that gives it a simpler operational profile. The company continues to gain share even in places where Oracle and other vendors are strong, especially in the enterprise. Some of Salesforce's marquee enterprise customers of late have many other products installed including Oracle, Siebel and SAP. But when decision-makers reach a point where they want to develop something such as Web applications in Heroku or social apps like the ones at GE, Coke and Toyota, Salesforce is making important inroads.

That reveals an important advantage for Salesforce. The company now has the capability to surround older systems with modern cloud, social, mobile and other technologies. As a result, Salesforce can continue to chip away at traditional deployments one application or department at a time. This is much the same strategy we see today in ERP where Microsoft, SAP and NetSuite are promoting two-tier ERP strategies that keep the old installed systems in place at headquarters but where all new development and deployment in the regions is done on modern cloud platforms.

Siebel is a product for more conservative organizations that are familiar with the IT paradigm of the late 20th century. They are at home with version releases, their applications and their business processes. On the other hand, Salesforce is the product of the clean slate. It is the product that you might throw away your conventional system for because it is such a departure from late 20th century standards; its adherents are more likely to be those who are comfortable with taking a judicious risk because with risk comes reward. Salesforce customers, more than any others, are inventing the future, inventing new business processes and often reinventing themselves.

Denis Pombriant is the founder and managing principal of Beagle Research Group LLC, a Boston-based CRM analyst firm.

This was first published in January 2013

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