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Gartner: CRM competitors inching in on Siebel

Gartner's Magic Quadrant rankings put Siebel Systems on top of the CRM market in many categories. However, a number of Siebel competitors are closing the gap.

Researchers at Gartner Inc. recently published their Magic Quadrant ratings for CRM software vendors in the business-to- business (B2B) and business-to-consumer (B2C) markets. And while Siebel Systems Inc. continued its domination of the rankings, report authors indicated that competition in the CRM space is rapidly growing more heated.

Stamford, Conn.-based Gartner publishes an array of Magic Quadrant reports annually to give IT buyers a snapshot of how vendors are performing. Each report categorizes the providers as one of four types: leader, competitor, niche player or visionary.

In both sets of ratings, San Mateo, Calif.-based market stalwart Siebel retained its place as the lone leader, ahead of companies such as Amdocs Ltd., E.piphany Inc., Oracle Corp., PeopleSoft Inc. and SAP AG. Yet despite the fact that none of these CRM vendors could penetrate the competitor quadrant and were resigned to the realms of niche players and visionaries, Gartner research director and report author Gareth Herschel said Siebel's lead is shrinking.

"Siebel is still ahead, but competitors are beginning to appear more closely in the rear view mirror," Herschel said. "What was a speck on the horizon a year ago is now a cloud of dust."

Specifically, Herschel said that Pleasanton, Calif.-based PeopleSoft has made up a significant amount of territory on the B2C side during the last 12 months, with San Mateo-based E.piphany gaining ground in the B2B market. In terms of growing overall CRM market share, Herschel said that SAP, based in Walldorf, Germany, has done the most to diminish Siebel's lead.

"Siebel has been losing market share over the last several years, mainly as a result of SAP," Herschel said. "With the other vendors, it's not necessarily at a point where Siebel is feeling pain, but these companies are making their presence felt. Deals are becoming more competitive, and other vendors are consistently winning in specific situations."

A prime example of another CRM software vendor dominating a certain arena is Ra'anana, Israel-based Amdocs' control of the telecommunications vertical sector Hershel said.

"Amdocs is winning against any vendor -- including Siebel -- in telecom," he said. "They're really the vendor to beat in that space and, with the acquisition of Xchange Applications Inc., they could potentially could head into other verticals."

PeopleSoft has done particularly well in establishing its CRM vision, according to Herschel, and is growing mind share among users outside of its enterprise resource planning (ERP) customer base. SAP is largely winning existing ERP customers over to its CRM message and hasn't had widespread success outside that audience, Herschel said. Another enterprise software company reaching beyond its customer base is Redwood Shores, Calif.-based database and financial software specialist Oracle, he said.

Siebel officials remained dubious that there is any growing threat to their company's continued domination of the market. Jeffrey Scheel, vice president and general manager, Siebel CRM products, said he remains confident that his company is not losing ground to competitors. When asked how Siebel will try to differentiate from the growing ranks of its CRM market opponents, Scheel replied that the firm would stay focused on its message of providing highly integrated, end-to-end applications.

"We've had a lot of feedback from these analysts telling us to continue to accentuate successes with customers around ROI, and to explain to users that, while CRM is challenging to implement, we have users that are being successful," he said.

Predictably, Scheel diminished the viability of vendors such as PeopleSoft and SAP, who entered the CRM market based on their presence in the ERP space.

"We still feel the biggest risk to the whole CRM space is that a competitor can add a few screens to an existing enterprise suite and cheapen the notion of what it takes to do CRM well," he said.

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