The upshot is that Siebel CRM OnDemand is different

I'm going to actually give Siebel some credit -- not something I usually do. Siebel is getting smart, very smart, and it's actually using its ties with Microsoft and IBM to rebuild its market position and become the fearsome beast it once was.

But it has a long way to go.

About a week ago, Siebel announced an agreement with British Telecom, a long-time evangelist for IT-related services, to host and resell Siebel's on-demand product, CRM OnDemand, in the United Kingdom. The speculation is that there are many of these types of arrangements in the works. What makes this deal significant is that Siebel is building a Microsoft-like reseller channel to push CRM OnDemand, rather than using its "classically trained" enterprise sales teams (which presumably would have to learn to make a different type of sale).

You'll also notice that there is little talk about UpShot Corp. in all of this. It's interesting to note, though, that the market that CRM OnDemand will most likely serve and the market that UpShot has historically served are distinct and not at all competitive.

The customer that CRM OnDemand will likely target is the more sophisticated small and medium-sized business (SMB) user that needs a relatively complex architecture and a wider range of CRM features and functions. Meanwhile, the ideal customer for UpShot is the same as it always has been: the small entrepreneurial company that has grown just beyond contact management and needs basic CRM functionality, with strong sales features.

Look at this chart, and the differences should become clear:

Some analysts are speculating that Siebel, with the help of the incredibly powerful IBM sales force, will have significant sales in its target market, creating substantial up-sell opportunities for its traditional enterprise applications.

Oracle tried something like this about three years ago with its "OracleSalesOnline" strategy. The company gave away the basic sales functionality with a hosted service. The idea was that the offering would be a hook to the larger enterprise applications. It wasn't.

But Siebel's approach is different from Oracle's. In fact, Siebel is taking a surprisingly intelligent approach, something that the company hasn't exactly been known for in the past two years.

So if you're looking at a hosted Siebel offering, be aware of the differences between OnDemand and UpShot. See which one suits your company best. Then be careful about if and what you buy, because if you do buy one of the two services, you're buying into the "Siebel way." That may not be the way for you to go. But, for the first time in a long time, it might.