Siebel Systems' Embarks on the Enron Attack

Starting with the January 21st issue of Forbes Magazine, continuing at the Q4 earnings call, and at the recent Goldman Sachs technology conference, software grandmaster Tom Siebel has embarked on what may be called "the Enron Attack". The attack is not directed at Enron itself - why beat a dead horse and one that furthermore was a Siebel Systems client? The attack is directed at Peoplesoft, Oracle, SAP, and anyone else left standing in the eCRM market. With an outstanding quarter behind it and the promise of even better quarters to come, Siebel Systems wants to make a competitive issue of balance sheets.

The Enron attack involves painting Siebel System's principal competitors with the same brush that has so tarred the reputation of anyone connected to formerly successful energy services firm - off-balance-sheet financing. Siebel is an excellent position to point fingers, Siebel Systems' balance sheet is as buttoned down conservative as its dress code. In cash, cash equivalents, and short-term investments the company has over $1.7 billion in liquid assets.

As was clear from the earnings conference call, Siebel has Peoplesoft most firmly in its competitive sights. Mr. Siebel made a point of calling the firm "Vantive" a number of times, questioning its accounting practices, and pointing out the low cost per sale in certain Peoplesoft wins over Siebel Systems. Many years ago Oracle Corporation would pick one competitor a year to try to drive out of business. We can only wait and see if this is the end game of the Enron Attack.     

Oracle Announces Siebel Migration Program

Showing its own competitive streak, Oracle (Nasdaq: ORCL) has announced a new campaign aimed at existing Siebel customers to convince them to migrate to Oracle E-Business Suite. The premise of the campaign, previewed at Oracle's Financial Analyst Day on January 30, is that a move to Oracle's e-Business suite can be accomplished at lower cost than upgrading to Siebel Release 7.0.

At the analyst day meeting, Siebel Systems strategic partner KPMG Consulting (Nasdaq: KCIN) was wrongly identified as supporting the program. Oracle rectified the mistake the next day by removing the page announcing support from its web site.

"Siebel Systems is a valued partner of KPMG Consulting", said Deborah Eastman, Senior Vice President at KPMG Consulting. She added, "Although we support Oracle's offer to upgrade Clarify customers, it is not our intent to support the Siebel part of the program. The way things were pulled together was misleading".     

Siebel Systems: Fit, Tan, and Ready for 2002!

Although 2001 was a difficult year for almost everyone, Siebel Systems is a much stronger company now than it was a year ago. Here are three advantages Siebel Systems enjoys thanks to the economic downturn:

Increased market share. Although current economic conditions have hit Siebel Systems' revenues hard, they have hit Siebel competitors even harder. In market after market, Siebel is gaining share over rivals - many of whom are not yet profitable. The longer the economic downturn, the more likely some will be forced out of business.

   Stronger balance sheet. Siebel Systems's management demonstrates they can manage a profitable business and generate a positive cash flow even in the most trying situations. The company's financial situation is actually stronger now than it was a year ago! Siebel's cash, cash equivalents, and short-term investments $57.2 million over last quarter. The company now has north of $1.7 billion in the bank. This has given them the ability to launch the "Enron Attack".

Better products. With Release 7, Siebel Systems will not only be the safe choice for IT managers, it also objectively the best product on the market. Although some people will never be persuaded to purchase Siebel applications, for many prospects the combination of market share leadership and product leadership is unbeatable.  

These three advantages demonstrate why Siebel System continues to have the potential to eventually emerge among the top rank of software companies on a level with Oracle. As Tom Siebel himself puts it: "The financial results are pretty remarkable. 1,100 software companies have gone out of business in the last year but we have continued the fastest growth of any company in the history of the applications software business."     

IndustryWeek Chooses Tom Siebel as CEO of the Year

IndustryWeek,   a publication dedicated to senior management in the business of manufacturing, today recognized Tom Siebel with its annual "CEO of the Year" award. The "CEO of the Year" award is determined by IndustryWeek staff. Previous recipients include Jorma Ollila, CEO of Nokia, Goran Lindahl, CEO of ABB, and Michael Dell, CEO of Dell Corporation.

At first glance this award seems a little odd since Siebel Systems is not a manufacturer and most of its installed base is concentrated outside the manufacturing sector. This selection will likely add to the controversy over whether media coverage can be bought and sold. (See the San Francisco Chronicle article Business Magazines Struggle to Maintain Objectivity Under Pressure from their Biggest Tech Advertisers).

In our opinion the recognition is well deserved and likely to be the first of many such awards. Congratulations Tom!     

PwC Consulting to Service Siebel ERM Products

PwC Consulting announced it will bring together Siebel Employee Relationship Management (ERM) applications and PwC Consulting's new B2E (Business to Extended Enterprise) initiative to joint customers.

"I'm seeing demand for ERM all over the board, especially among Siebel Systems' largest clients," said Jeff Jordan, a partner in PwC Consulting's Customer Relationship Management practice and global leader for its alliance with Siebel Systems. "One of our first implementations was in the financial services sector, and one of our latest was for an energy company in Spain. Siebel customers who made a substantial investment in the technology want to expand the footprint of their solution."

PwC Consulting is also reporting a renewed interest in technologies, such as portals, that allow companies to maximize workforce productivity with existing assets.  Responding to this interest, PwC Consulting developed its B2E solution. Launched over two years ago, the B2E initiative is a collection of applications and services organizations can use to streamline their business. "The B2E initiative expands on PwC Consulting and Siebel Systems' successful track record together," said Jordan.

The decision to support Siebel ERM as an important component of PwC Consulting's B2E solutions set was driven by two of PwC Consulting's service lines -- CRMs and HCs (human capital solutions).  The CRM service line has more than 3,600 consultants working with more than 850 clients. Gartner Group has listed the CRM practice of PwC Consulting as a leading CRM service provider for the past three years. In the Human Capital space, PwC Consulting's HCs practice boasts more than 1,000 consultants.

These two service lines collaborated  to determine customer requirements, industry best practices, and the competitive landscape. The results were then compared to what Siebel had to offer in ERM.  

PwC Consulting's solution set combines consulting, systems integration, and IT governance services with products that address security, identity management, hosting, and a range of business applications to establish a comprehensive infrastructure.  Central to this is offering "anytime, anywhere"  access to Internet and Intranet applications in a secure, outsourced environment.

Siebel ERM 7 provides applications that streamline information and offers content management, training and education, team collaboration and technical support. By improving organizational alignment, increasing employee satisfaction and retention, and reducing the cost of employee processes, Siebel ERM 7 can deliver increased productivity and profitability.

Some of the business drivers PwC Consulting has identified as important to B2E clients include:

• Internet clean-up and consolidation projects,
• Corporate restructuring (M&A, spin-offs and other divestitures),
• Prior or planned ERP investments,
• Globalization,
• Convergence of B2B, B2C and B2E,
• E-enabling company -- parallel CRM and e-exchange projects.

Palm Debuts the i705

Palm, Inc. (Nasdaq: PALM) has launched the Palm i705 handheld as part of an effort to deliver better wireless solutions to mobile professionals. Of added significance is the fact that Siebel Systems and Palm recently strengthened their existing alliance to jointly sell mobile applications to large corporate customers. As part of the alliance, Siebel Systems will deploy Palm i705 devices to its entire sales force.

The Palm i705 may prove to be the Rosetta Stone of successful field sales projects. Although successful field sales projects have one of the highest return on investments (ROIs) of any enterprise applications, most fail. The experience Caradon IT Manager Bob Southward had when he issued each rep a handheld pricing tool is illustrative. Less than half the sales force even turned it on. Some analysts believe as many as 55% to 75% of all field sales projects are ultimately unsuccessful. So Southward's experience is more the rule than the exception. Field sales projects do not work when the very people who are supposed to use them - the field sales force - reject them. In contrast, general customer relationship management (CRM) projects - call center, marketing automation, and even field service projects fare much better. They can usually be expected to succeed.

The reason many projects failed in the past is because they required reps to carry around a heavy eight-pound lap top loaded with a multi-tasking operating system, relational database, and client-server application. Some of the practical limitations of that solution include having to find electric outlets, and outside phone lines, and having to wait several minutes for the laptop to boot up each time you used it. Since field reps travel, by definition, this technology demanded they be able to resolve technical issues, especially data communications problems, themselves. So many reps have found laptops were most useful when left in the hotel.

At the same time reps have been rejecting field sales laptop based systems, they have been adopting personal digital assistants and mobile phones - often at their own expense. Palm has become the handheld device of choice among field sales representatives. Of the Fortune 1000 companies that have handheld standards, Palm   is the standard 85% of the time. Of these companies, 57% use Palm exclusively.



The significance of the Palm i705 is that it combines two technologies field sales representatives had been adopting on their own: wireless and handheld devices. The Palm i705 offers these benefits:

• always-on email,
• standard Palm features, such as Date Book and Address Book,
• web browsing,
• support from Siebel Sales Handheld 7.

SYNAVANT Enters into a New Alliance with Siebel

"This new agreement is an evolution of our relationship with Siebel Systems,"
Wayne P. Yetter
Chairman of SYNAVANT

SYNAVANT (Nasdaq: SNVT), one of the pioneers of CRM in the pharmaceutical sector, has entered into a consulting partner alliance with Siebel Systems to cover the life sciences market.

Under the terms of the new agreement, which supersedes the former software partner relationship, SYNAVANT is no longer a reseller of software licenses. The company will continue to support implementations of Siebel ePharma, and provide related support services to pharmaceutical companies. The company also assumes additional rights to provide ERM services. SYNAVANT will continue to offer complementary software products to ePharma.

"As Siebel Systems gains market share software becomes less of an issue", said Ken Tyson, Senior Vice President, International. "Customers are less interested in the underlying technology and more interested in the total solution. To use an analogy from the automobile industry, they don't necessarily care what's under the hood of their car as long as it gets them from point A to B. We want to use the best engine under the hood of our car and think that engine is Siebel."

SYNAVANT will continue to support its customers that have licensed its proprietary technology. The company was formed by the spin-off of the Strategic Technologies and Clark-O'Neill units from IMS HEALTH. The company is headquartered in Atlanta, GA and has offices in 23 countries. Clark-O'Neill was founded more than 50 years ago to provide interactive marketing services to the healthcare industry. A good contact for more information at the company is Jim Cain Senior Vice President, Global Marketing and Customer Development, at 404-841-4000 jcain@synavant.com.                              

John Schmid Joins Participate Systems  

Participate Systems has appointed John Schmid vice president of worldwide sales. Schmid left Siebel Systems to join the Chicago software firm.

At Siebel, Schmid was regional director for the Central Region. In that region Schmid and his team closed big deals with   Ford and General Electric among other companies. Prior to Siebel, Schmid was at Hyperion Solutions, NCR Corporation, and AT&T Network Systems. He also holds a master's degree in business administration from the J.L. Kellogg School of Management and a bachelor's degree in computer and electrical engineering from Purdue University.

"We're delighted to have John on board to spearhead sales of our software," said Alan Warms, chairman and chief executive officer of Participate Systems. "Our software allows management to track how a sales person interacts with the client. It's really a much bigger problem than just CRM. Our typical client is a Vice President of Sales who has to cut back on sales support staff while delivering more revenue than ever before. They have to transform the way they go to market with partners and suppliers. In large part this means shifting from a product type sale to a solutions type sale. That's why we needed someone with terrific domain expertise to lead our sales organization, someone who understood how sales people use technology, and how executives make decisions about technology. We think we found that person in John Schmid."

Founded in 1997, Participate Systems is privately held and headquartered in Chicago. The company's clients include BEA Systems, Cisco, IBM, Microsoft, SAP, and Wrigley.

John's contact information is:

550 W. Van Buren
17th Floor
Chicago, IL 60607

(312) 279-9500

jschmid@participate.com