Michael Fields, director of business sales operations for Cingular Wireless, first realized something was different at Siebel Systems Inc. in October, during the company's annual U.S. User Week conference. For one thing, there seemed to be more sessions focused on solving customer problems with CRM software -- such as achieving ROI -- and fewer ones aimed purely at pitching Siebel software products. Also, Siebel executives seemed friendlier, more sociable, more interested in hobnobbing with the common customer.
"Upper management was very personable. Tom Siebel seemed more customer-focused then I've ever seen him," he recalls.
That, in a nutshell, is exactly how Siebel hopes all its customers will come to view the company in 2004 -- as a friendly, service-oriented supplier of affordable CRM software. CRM for the average man, if you will. Or, as Siebel has dubbed this image makeover effort, "CRM for everyone." Long viewed as a provider of complex, top-of-the-line tools for the Fortune 1000, Siebel is striving to target a more mainstream market in the year ahead.
But can Siebel succeed at such a transformation? Bob Thompson, CEO of CustomerThink Corp., a publisher of CRM analysis and advice, is skeptical. "It's easy to put together a marketing presentation, but not so easy to execute that in the short term," he says, noting that Siebel software scored dead last in customer satisfaction on CustomerThink's most recent survey.
The products Siebel has so far announced in support of its "CRM for everyone" strategy include its upgraded 7.7 applications, which are touted as having an enhanced user interface, improved wireless support, and easier installation, configuration and management features. The other element of the strategy is Siebel's CRM OnDemand subscription software service.
Bonadio particularly likes version 7.7's TCO-related improvements. "They address the complexity issue, focusing more on application management and operations," Bonadio says. He also gives a thumbs up to Siebel's Customer Analytics, the first of the 7.7 applications to be released. "They're starting to layer in predictive analytics and data mining into the traditional reporting and exploratory analytics. That will help them sell analytics to their installed base," he says, noting that it will also help Siebel to attack incumbents in the business intelligence market, such as Cognos Inc., MicroStrategy Inc. and Business Objects SA.
CRM OnDemand, announced in partnership with IBM Global Services, is aimed at giving customers a cheaper alternative to buying a full Siebel software license. That's a boon for small firms and large customers with many casual users not in need of the full Siebel feature set. At $70 per user per month, it competes with Salesforce.com, the current leader of the hosted CRM market, which offers a service that costs $125 per user per month.
The development of CRM OnDemand, coupled with Siebel's recently completed purchase of UpShot Corp., a former competitor of Salesforce.com, was a smart move, analysts say. According to Sheryl Kingstone, an analyst with the Yankee Group, not only does Siebel have a good product in its CRM OnDemand application, but the company now also has UpShot's hosting expertise and its integration with Microsoft Office. "Now they can leverage the IBM WebSphere [Java] platform, [as well as] the Office platform," she says.
The acquisition will also help Siebel to compete against Salesforce.com, Kingstone says: "Salesforce was picking off their customers. This will slow down that migration."
But is Siebel's foray into subscription software, and its "CRM for everyone" strategy, enough to enable it to retain its status as the No. 1 CRM vendor? Analyst opinions differ. Some see Siebel losing ground to PeopleSoft and SAP. "SAP is [going to be] the de facto leader, with PeopleSoft a good second for 2004," declares Fran Howarth, the leader of Bloor Research's enterprise business applications practice, noting that SAP has a large installed base of its enterprise software to sell to.
Case in point: SAP customer Suresh Ketha, the CEO of Global Enterprise Management Solutions (GEMS), a software consulting firm in Dallas, plans to replace a combination of QuickBooks, Excel and Siebel with SAP's enterprise software. The goal is to better integrate the GEMS sales process with its service and administrative processes. "We're looking for something that can work out of the box, and SAP gives us that," he says. Ketha notes that GEMS recently tried Siebel's mobile sales application but that sales reps complained about what they saw as a lack of synchronization capability with the company's server.
CustomerThink's Thompson doubts Siebel will be able to overcome its own product-centered culture to become more customer-driven: "Part of their problem has been that their business model was engineered for the go-go times -- big expensive projects, best products, excellent executive marketing. Those days have gone. It will remain among the top two or three of [CRM vendors]. But will it be the top leader, with double or triple the market share of the next competitor? Probably not. It's lost a lot of momentum, and it's going to take time to gain it back."
Bonadio agrees that Siebel faces challenges ahead, but he believes it will retain its lead market position, albeit with PeopleSoft running an increasingly close second. "In our analysis, there is only one leader, and that's Siebel. Things in the CRM space in general are picking up, and Siebel will benefit from that," he says, adding, "From talking to customers, I feel a renewed sense of optimism in Siebel's business."
This was first published in November 2003