Siebel -- Making a bid as the page turns

Former IBM executive Mike Lawrie takes the Siebel reins at an interesting time in the company's history. Columnist and industry expert Paul Greenberg sizes up the challenges Lawrie is facing -- from the release of Siebel 7.7 to competing with rival SAP.

By now, there isn't anyone reading this column who doesn't know that Tom Siebel stepped down as CEO and Mike Lawrie,

a former IBM executive, took his place. Siebel kept the chairman's position and will remain a lesser but still influential figure at Siebel. Lawrie, who is accustomed to meeting $80 billion quotas, takes the helm at a time of profound transformation in the CRM world. What does Lawrie face? Let's take a quick look:

  • Oracle -- PeopleSoft (a.k.a.. Orcs v. Humans) war scene: Siebel's role in this has been oddly muted, but its market strategy will be altered based on the outcome. It still has to sell software against whichever of its competitors exist. It faces a greater challenge with SAP (see below) than even an Oracle/PeopleSoft merger (which I don't believe will be successful).

  • The release of Siebel 7.7: Technologically, Siebel 7.7 is a great leap ahead, even though Siebel is planning a J2EE rewrite, according to a report released by Forrester Research. Also interesting is Siebel's apparent strategy with Siebel 7.7. The first releases weren't "pure" CRM with the exception of Sales 7.7. (The company released Employee Service, Learning and Consumer Goods.) This, along with Siebel's push for UAN 3.0, seems like a strategy of enterprise applications and vertical markets, rather than just selling the classic CRM modules. I'll look at Siebel 7.7 much more in my next feature after users have had more time to digest it.

  • Threat of the hosted market to the big guys, including the successful initial public offering of Salesforce.com (ticker symbol: CRM): With the IBM-allied product, Siebel CRM OnDemand and its acquisition of Upshot, Siebel is directly competitive with Salesforce.com, Salesnet Inc. and NetSuite Inc., even though it is actually working from a different model. The CRM OnDemand model is more about selective functionality than a direct push to the midmarket or small business. However, that will overlap with the SMBs and, as I have said in the past, it actually is a good product so it can battle with the best of them.

  • Transformation of CRM to a continuous strategic initiative, not just applications and systems: This is where all the big vendors will fall a little bit, whether they can provide back office functionality or not. CRM is now the overarching strategic requirement for any firm, big or small. Most of the vendors haven't been able to deal with strategy well. Siebel actually has an advantage here, providing free strategic services through a unit run by Siebel's vice president of customer strategy, Peter McCullagh.

  • Sustained drive by SAP with NetWeaver architecture and platform: Siebel will compete head-to-head with SAP through a major push for its Universal Application Network (UAN) -- the Siebel integration framework. However, they have a different approach than SAP. SAP is using NetWeaver to transform its entire company to become another Microsoft -- hoping NetWeaver will be the guts of any big enterprise, whether it is using SAP applications, and/or anyone else. Siebel is using UAN to overcome the lack of back-office applications and appeal to a wider market that might be using Siebel and/or anyone else. But they will compete head-to-head and it will be bloody. SAP looks really good, so Siebel needs to be on full alert here.

  • Change in Siebel image: The word according to analysts, as well as my contacts, is that Lawrie is considerably more customer-friendly than Tom Siebel. I don't know the man myself, and that can only be a good thing. The culture, formerly notoriously difficult, is changing as a new era begins. It started when Jeff Pulver joined a year ago as vice president of worldwide marketing, and continued with the increasingly public visibility of Siebel executives like Kevin Nix, Siebel's Group vice president, Industry Applications, a charming person and very capable leader. Lawrie can only improve the tarnished public image Siebel battles.

  • End of mass marketing and rebirth of micro-mass marketing: Two years ago, I would have said Siebel's analytics applications, necessary for "knowing the customer" without "knowing the customer," weren't up to it. But they are much better now and, in fact, International Data Corp. recently issued a report stating that Siebel was the market hare leader in customer analytics with over 15%, so some customers out there must like what they are getting. Lawrie is facing a long road but one that actually promises a new era at Siebel -- I hope.

    Paul Greenberg is president of The 56 Group, LLC and author of "CRM at the Speed of Light: Essential Customer Strategies for the 21st Century, 3rd Edition" (McGraw-Hill Osborne Media, August 2004).

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