B2BWorkforce - Siebel Observer

April 26, 2002

Mastery and Individuality in Barcelona

The Universal Application Network

Siebel Systems Reports Steady Quarter

Blue Pumpkin Launches Resource Planning for Contact Centers

Hummingbird Portal and Document Management Applications Integrated

Cybrant Throws in the Towel

< /p>

Last Week's Gainers and Losers
Dow NASDAQ S&P500 e-50 SOI	Close 9,910.72 1,663.89 1,076.06 25.44 289.09	Change -30.45 -111.68 -21.92 -4.02 -42.15	Percent 0% -6% -2% -14% -13%
Company	Close	Change	Percent
Siebe l Accent ure AMS Answe rThink Avaya Blue Martini Cap Gemini Cisco Davox Infor te Jacad a Primu s SPSS< /a> Tietonator WITS< /a> Xansa	22.59 21.80 21.72 5.90 6.32 1.13 64.50 euro 13.91 8.75 11.45 3.00 1.52 17.001 253.00 Sk 8.47 165 p	-8.30 -5.30 2.82 0.96 1.32 -0.42 -12.10 euro -2.78 0.04 1.95 -0.22 0.32 -0.67 -13.00 Sk -4.28 -118 p	-27% -20% 15% 19% 26% -27% -17% -41% 0% 21% 0% 27% -4% -5% -34% -42%

Our customers have clearly communicated the importance of application integration

Tom Siebel

Events

May 5-7
Fast Company Real Time Conference
San Diego, CA

May 6-8
DMA/AIM net.marketing Conference and Exhibition
New York, NY

May 13-16
GigaWorld IT Forum
Broadmoor Resort
Colorado Springs, CO

May 15 - 17
Gartner IT Services and Sourcing Summit 2002
Rio Suite Hotel & Casino
Las Vegas, NV

May 15 - 16
DCI Customer Relationship Management Conference and Expo
London, England

May 21-23
Service Networks Spring 2002 Conference
Baltimore Convention Center
Baltimore, Maryland

May 22-23
Gartner Customer Relationship Management
Paris, France

In Association With

Disclaimer

The Siebel Observer is not
affiliated with Siebel Systems, Inc.
Just as the Siebel Observer does not
endorse everything Siebel Systems does,
Siebel Systems does not endorse Great
Divide Research or the Siebel Observer.
This is your guarantee the newsletter
will remain an objective, factual source
of information.

Mastery and Individuality in Barcelona

If we admit that human life can be ruled by reason, the possibility of life is destroyed.

Leo Tolstoy

Barcelona, Spain's most distinctive city, was the setting for this year's Siebel European User's week. It is a comfortably sized city of 1.5 million with a unique culture that makes it one of Europe's most popular destinations. Located on the very north of the Spanish coast, this Mediterranean port is today the most cosmopolitan and prosperous city in Spain. Barcelona has always strived to distance itself from the rest of the country by following the latest tends and occasionally by setting them. This   made it an especially appropriate setting for Siebel's User Week.

The city is noted for its architecture and distinguished by the efforts of Anton� Gaud� whose masterful La Sagrada Familia cathedral remains a unique and unfinished artistic vision. In addition to architecture, painting masters Joan Mir and Pablo Picasso did some of their best work in Barcelona in a civic atmosphere that rewards ambition and applauds individuality.

One of the more unfortunate aspects of individuality is that it sometimes leads to poor choices. From time to time in its history Barcelona has made poor choices and been repressed as a result. One was made in 1702 when Barcelona sided against Felipe V during the War of the Spanish Succession, ending up at war with both Spain and France. Uncounted thousands died and the city remained oppressed for the rest of Felipe's life.

A more recent example of a poor choice occurred 70 years ago during the Spanish Civil War when for nearly a year revolutionary anarchists and the Workers Marxist Unification Party ran the city. By May 1937 differences between them had broken out into street fighting that killed 1,500 people. Matters were only settled in January 1939 when Barcelona fell to General Franco and many more years of repression followed.

Even as recently as the early 80' when I was a college student traveling around Europe, Barcelona still struggled to throw off a sense of poverty and repression left over from the Franco era. A happier landmark in Barcelona's history came with the successful Olympic games in 1992 that marked the city's rejuvenation and a return to prosperity for the 2,230 year old city.

For me the changes in Barcelona's fortunes were best represented by Hotel Grand Marina where I stayed. Located on a wharf in the old port, the hotel is well within sight of the Columbus Monument, the Gothic Quarter, and Los Ramblas. The smiling, chic hotel staff told me they could hear the sounds of Mexico in my Spanish, showing that prosperity had not completely dulled Barcelonian charm or recognition of the individual. As a demonstration of Barcelona's recent prosperity, the hotel cost $300 a night or about 50 times more than I paid as a student to stay a few blocks away.  Yet in the morning there was no hot water and when I checked out late no one seemed particularly put out. This reminded me of the eternal character of Barcelona.

The press conference that followed our departure from the hotel was another cold shower. Like any industry, the software business has its own grand drama and low humor. Below the surface of every major event are enough intrigue, betrayal, and unexpected twists of fate to fill a dozen operas. Unfortunately for future masters, software dramas turn around a product so abstract that the plots are impossible to make into good tunes. It then falls to the lesser children of the Muses - analysts, journalists and reporters - to bear witness to the   dramatic events.

Of course the software business has always been driven by individuals whose larger-than-life personalities have shaped its course. Men like Bill Gates, Larry Ellison, and Flip Filipowski have made the business (for better or worse) what it is today. Tom Siebel is one of these individuals. Where Gaud� once worked in stone, Picasso and Mir worked in oils, Tom Siebel now works in software and finance. What he has created with Siebel Systems is every bit as grand, detailed, and elaborate in its way as the La Sagrada Familia cathedral. Siebel Systems is about creating order from chaos. It is about making things uniform, anticipated, and predictable - and thus allowing the individual to avoid bad choices.

Glamorous Italians, earnest Germans, elegant French, joking Brits, solid Swedes, we make our way into the press conference like some United Nations of nerds. As the lone American journalist at the event, I am a proud representative of Team USA. As we slowly enter a room just swept by security, a sudden tension becomes almost palatable and a chill sweeps the entire group.

Because it is a product company, Siebel Systems would prefer that journalists write about their products (in this case the Universal Application Network, see below). Yet because of his personality, journalists are invariably drawn into writing about Tom Siebel and the eponymous world of his creation. Tom Siebel is a man of unusually wide experience. That he is influential   is undeniable. He was the cover of Forbes for being "the man who could see around corners". One measure of his influence is a quick search of Goggle turns up 366,000 references to Siebel.

In person, Tom Siebel takes the press very seriously - more seriously than many of us are used to  being taken. Tom has weighty and serious matters to tell us and does not brook any interruption. He does not suffer fools gladly, especially the European variety. Soon everyone is captured by his mood as much as by his message. He measures his words carefully.

"Let's look at what's going on in the enterprise applications software markets globally. In 2001 we have experienced dramatic compression in the enterprise applications software market. If you look at Department of Commerce data from the United States, the average private investment in software in the last thirty years averaged 19 percent per year; in 2001 it was 3 percent. So we are seeing a compression in the information technology industry unprecedented in the history of the industry....This appears to have been possibly the worst quarter in the history of the enterprise applications software business. Expectations were already set quite low and then they missed--and missed big.... We saw something on the order of 700 software companies issue warnings and earnings shortfalls last year and this is continuing."

For those of us in the software business, especially the trade press, this is sobering to consider.  The man who sees around corners has just revealed   that most of our advertisers are going out of business!

The good news (for some of us) is that Siebel Systems will survive. Solid financial results, great products, and market leadership make Siebel a cork in the ocean of change sweeping the software business. Rather than news of the Universal Application Network, word of Tom's remarks soon sweep around the world. Later the fall of the U.S. stock market will be attributed to the comments he made in Spain. Those of us who were in the audience that day can now only sit and wonder what the future holds after being in the presence of a true master.

The Universal Application Network

The software business is characterized by rapid technological change, frequent introductions of new products, and evolving industry standards. Wide spread adoption of the internet by everyone with a computer is a good example of the rapid technological change that alters the competitive dynamic of the business. Simply being able to link all computers together is causing many new products to be introduced and is spawning a host of new standards.

One of these standards was announced in Barcelona at Siebel European User's Week. The Universal Application Network is designed to reduce the need for custom integration, speed deployment to lower the total cost of software ownership (TCO). The Universal Application Network is supported by a Holy Roman Empire like group of integrators and software vendors. They include Cap Gemini Ernst & Young, Accenture, KPMG Consulting, SeeBeyond, TIBCO Software, Vitria, webMethods, and IBM. Since the announcement was first made, both BMC and Jacada have joined the effort.

The Universal Application Network takes a standards approach to common business processes, such as updating addresses or adding new services. What the standard promises is business processes that are:

end-to-end,

industry-specific,

extensible,

re-usable,

based on industry standards,

deploying proven technology.

The biggest promise the standard makes is to free customers from a single vendor's proprietary products and allow them to select the software industry's best technologies.

At this stage in its life the Universal Application Network raises more questions than it does answers. Two come to mind immediately. Why is Siebel Systems doing this and will it work?

Since Tom Siebel is one of the foremost tactical and strategic thinkers on the software scene today, speculating at the reasoning behind his thinking is like speculating at the reasoning behind a master chess player's move. There may be much more to UAN there than first meets the eye. Hazarding a guess, we would conclude that the UAN is a tactical move designed to head off two sets of competitors. One are the SAP, Peoplesoft, Oracles, and J.D. Edwards of the world who are trying to gain a competitive advantage by offering a more complete set of products than Siebel Systems currently fields. By completing much of the integration work before the product is purchased, the UAN partly overcomes the principal advantage of standardizing on one vendor. The second set of competitors that the UAN undermines is a whole host of companies basing the next generation of CRM products on emerging standards like Microsoft NET. To these competitors, Siebel Systems will be able to respond to any pause in the sales cycle by pointing out that Siebel applications are standards based as well.

This leads to the second question, can Siebel Systems be successful with The Universal Application Network. The answer partly is that they are already achieving some success just by announcing the existence of the standard. Within some client accounts, champions of the Siebel purchase can now point to the standards as a reason to move forward.

Siebel Systems may also be successful in forcing the adoption of The Universal Application Network as a standard. As one very seasoned partner at a big five consulting firm points out, Siebel Systems is especially well placed to beat sense into its partners' heads when disagreements over the standard arise.

Despite this, adoption of the UAN as a standard is not a given. Many years ago IBM tried to make OS/2 the standard among PC operating systems. Despite its strength in the market, OS/2 is now a footnote in computing history. It is also significant that some of Siebel Systems most important partners, including Sun Microsystems, Deloitte Consulting, and Microsoft did not participate in the announcement.

Will the Universal Applications Network prevail as a standard? Stay turned here to find out.

Siebel Systems Reports Steady Quarter

In a quarter marked by many earnings disappointments, Siebel Systems (NASDAQ: SEBL ) reported healthy, if unspectacular, results to begin 2002. The company announced sales of $477.8 million, down from $598.8 million a year ago - a 25% decrease. Despite the decline, the company was able to show a profit of 13 cents a share, a decrease of only 15% from last year.

Software license revenue also declined slightly. During the first quarter new license revenue fell to $246.05, a little less than the $250.2 million of a quarter ago. This figure is still robust compared with the $193.5 million reported in the third quarter of 2001. Compared with the Peoplesoft and Oracle annoucements this is good news for the Siebel ecosystem.

Revenue from maintenance and consulting decreased 3% during the quarter from $238 to $232 million. This is the first concrete proof in the numbers that Siebel Systems is actually giving consulting partners more business.

The company added more than 200 new customers to its installed base, including: AdvanceRX.com, American Red Cross, Banco Espanol de Credito, Banco Electronico Servico Total (BEST), Bank of the Philippines Islands, Call-Net Technology Services, DAB Bank AG, Ducati Motor Holding Spa, Echostar, First American Real Estate Solutions, Hong Kong and China Gas Company Limited (Towngas), Lexicon Marketing, Lexmark, Morningstar Foods, Nationale Nederlanden Schadeverzekering, Network Appliance, Optimus Telecomunicacoes, Pharmacia Corporation, Samsung SDS, Sentry Insurance, South African Revenue Services, Telesp Celular, U.S. Department of Education, and the U.S. Immigration and Naturalization Service.

In the analysts conference call, it was revealed that more than 50 deals in excess of $1 million, which the company had expected to close, had slipped during the quarter.

Siebel Systems also did business with more than 300 existing customers. This is significant. From quarter to quarter, a relatively small number of customers generally account for a significant percentage of Siebel Systems revenues. For example in 2001, license revenues from its ten largest customers accounted for 23% of total software license revenues. In an economic environment where new customers are hard to sign up, good relationships with existing customers are the key to a successful quarter.

Blue Pumpkin Releases a Resource Planning Tool for Contact Centers

The Blue Pumpkin Planner takes a new approach to work force and budget planning, particularly for multi-skilled and multi-channel contact centers. The Planner gives managers the ability to make better decisions by helping them identify different staffing strategies to support growth, or achieve profitability goals. Unlike other applications that only plan for headcount needs, Planner challenges and examines the strategies behind the headcount with a high-level view of each staffing scenario. This allows the advantages and tradeoffs of different plans to be compared and the best one determined.

"Strategic planning has moved to the forefront of business agendas, especially in times of change and uncertainty due to restructurings or other cost-cutting initiatives," explained Robert Mirani, Director of Customer Relationship Management Strategies for the Yankee Group.

"We're excited about this new offering, because it adds a new dimension to aligning people skills with business goals," stated Doron Aspitz, chief executive officer and co-founder of Blue Pumpkin. "It gets businesses to think more critically about their resources so they can anticipate and evolve their workforce strategies to manage change."

Blue Pumpkin Planner helps contact centers answer such questions as:

What savings will result if cross-skill agents were used?

How will outsourcing effect costs?

What will the impact of a training program be on service levels?

To address these questions and others, customer can use Blue Pumpkin Planner to experiment with numerous variables in comparing different staffing strategies, such as hiring plans, attrition patterns, work assignments, skills, and other crucial factors. This takes the guesswork out of planning by quantifying the impact of each variable on service level and cost. This helps justify staffing plans and budget recommendations. It helps in capital resources decisions - such as purchasing hardware, software, desks, etc. - in order to complete the budget.

Timberline Software, a software company for construction and property management industries uses Blue Pumpkin Planner to help it improve customer satisfaction among its 25,000 customers worldwide.

Mark Brannan, contact center operations manager for Timberline, indicated, "The difference Blue Pumpkin makes on our strategic planning is a great competitive advantage. Planner shows us specific solutions to save money and improve performance. For instance, in one scenario, we could save $1.5 million in staffing costs just by reducing shrinkage a bit and extending phone shifts by 15 minutes."

"Blue Pumpkin Planner helps to prepare an accurate staffing roadmap for the next year that could be easily communicated with all levels of the organization," explained Bill Seawick, chief marketing officer of Blue Pumpkin.

Blue Pumpkin Software was founded in 1996 by a team of personnel forecasting and scheduling experts with advanced degrees in Computer Science and Mathematics from Stanford University. Aberdeen Group recently recognized Blue Pumpkin's engagement with Compaq Canada as one of the top 10 customer relationship management (CRM) implementations of the year in North America, noting Blue Pumpkin's return-on-investment (ROI) and excellence in customer service results. The company has nearly 800 customers including ADP, Apple Computer, Airborne Express, AOL/CompuServe Europe, AT&T, Kaiser Permanente, KitchenAid, TimeWarner Cable, and Verizon. A good contact at Blue Pumpkin is Satya Misra, Senior Director, Technology Alliances at smisra@bluepumpkin.com or 408-991-6430.

Hummingbird Logo

Hummingbird Portal and Document Management Applications Integrated

The integrations of both Hummingbird Enterprise Information Portal (EIP) Version 5.0 and Hummingbird Document Management (DM) Version 4.0 have been validated by Siebel Systems for Version 6. Hummingbird plans to complete validation with Siebel 7 in Q2 of this calendar year.

"The trend in the portal space has been towards more open portal frameworks as opposed to standardizing on any single vendor's platform," said Allen Bonde, President of The Allen Bonde Group. "Clearly Siebel understands this, and is working not only to make their portal capabilities more open, but also to continue to partner with vendors like Hummingbird that have a range of products for supporting portal initiatives."

Hummingbird EIP combines components from all Hummingbird's products; it is a scalable application and platform-independent solution. This product features an XML-based plug-in architecture to integrate different enterprise applications into an personal Web-based workspace. Hummingbird EIP provides more than 200 e-Clip plug-ins to provide pre-built integration to existing information sources.

Hummingbird Document Management Solutions gives organizations the ability to create centralized repositories, or libraries, containing all of the unstructured data they generate: files, email, text, forms, records, and other documents. The package includes search and retrieval tools, version control, security, imaging, routing, and records management services.

"This doesn�t change our offering, it significantly enhances what our common clients can achieve," said Rick Dobbs, Senior Alliance Manager at Hummingbird.

The Hummingbird Portal is based on eight key design elements:

Single Logon - Authenticates users with one username and password for all information sources and applications accessible to them.
Unified Search - Drilldown through all internal and external data sources with a single query, and return a unified result set.
Personalization - The portal workspace environment can be customized.
Application Integration - e-Clip plug-ins integrate with existing enterprise applications.
Collaboration - Utilize discussion groups, messaging, voting, and e-Clip integrated third-party tools to share information via the centralized workspace.
Security - Built using existing security models.
Scalability - Deployable to tens of thousands of users.
Openness - Designed to be platform, application,and device independent.

Headquartered in Toronto, Canada, Hummingbird Ltd (Nasdaq: HUMC< /a>) employs 1,300 people in nearly 40 offices around the world. Over five million employees use Hummingbird to connect, manage, access, publish and search their organization's content. A good contact at Hummingbird is Rick Dobbs rick@hummingbird.com or 415-377-7889.

Cybrant Throws in the Towel

Siebel competitor Blue Martini Software (Nasdaq: BLUE< /a>) has acquired Cybrant Corporation, a configuration, pricing, quoting, and guided selling applications software vendor founded by an early competitor of Siebel. The move strengthens Blue Martini's offering in some industry verticals in which historically Siebel Systems has not been strong.

Cybrant's applications are used to sell, price, and quote complex products. By acquiring Cybrant, Blue Martini adds to its product offering in both the manufacturing and retail verticals. The company plans to incorporate Cybrant's interactive selling applications into Blue Martini Manufacturing, as well as into Blue Martini Retail. This will allow Blue Martini Retail to provide selling assistants to help guide customers both on line and in stores. The combined solution is expected by the summer of 2002.

The acquisition was attractive to Blue Martini for a number of reasons. Both Cybrant and Blue Martini applications are built in Java 2 Enterprise Edition (J2EE), and support both the IBM Websphere and BEA Weblogic application servers, making the integration easier.

The acquisition also extends Blue Martini's current installed base. Some Cybrant clients include 1-800-FLOWERS.COM, Advanced Switching Communications, Answerport, Barnes & Noble.com, Convergent Networks, The Chamberlain Group, Cisco Systems, eBags, Hewlett-Packard, Legato, Newton Instruments, Riverstone Networks, and Trimble Navigation, and Xerox.

Also, Blue Martini acquired the company at a tremendous price. The company issued 4.5 million shares of its common stock to purchase all of Cybrant Corporation's stock and assets. At current price of BLUE, the transaction is worth $6.5 million. This is a fraction of what the company once would have cost. In August 2000, Siebel Systems acquired a similar company, OnLink, for $609 million in stock. Even at today's prices, the OnLink transaction is still worth $93 million.

The company has about 50 employees, including co-founder Dave Buchanan. Dave previously founded Aurum Software, an early competitor of Siebel Systems, with his wife Susan Buchanan. With him at Cybrant were a number of ex-Aurum executives including Jeff Galea, Dave Murphy, Brigitte Wilson, and Randy Roggensack.

The news is interesting for a number of reasons. It validates Tom Siebel's comments in Spain at the Siebel European Users Week and the New Economic Forum about the "dramatic compression in the enterprise applications software market". It illustrates how the Customer Relationship Management (CRM) market is fragmenting into number of industry specific CRM markets. Finally it demonstrates how difficult it has become in the current economic environment for even the most seasoned software entrepenures to match past success.

Does your company already subscribe?
You might be eligible for a free subscription!

Corporate Subscribers List

Subscribe or Unsubscribe

Copyright © 2003 The Siebel Observer LLC All Rights Reserved.
The information contained herein is believed to be reliable, but not necessarily complete nor can its accuracy be guaranteed. For further information on the material featured in the Siebel Observer, contact 303-399-8399 or editor@siebelobserver.com.
All trademarks are property of their respective holders.