Siebel Systems (NASDAQ: SEBL) surpassed analysts expectations to report new license revenue in the fourth quarter of 2002 of $157 million, compared with $126 million - a 24% increase.

"In Q4 everything got a little better all around the world," said Tom Siebel, Chairman and CEO. "It could be transitory, but I don't think so."

Revenues from maintenance, consulting, and other services were $237 million - a 3% increase over the third quarter. Total revenues increased to 11% to $394.7 million. As expected, Siebel Systems reported a net loss of 8 cents per share due to a restructuring charge of $95.9 million. Excluding the restructuring charge the company earned $23 million or 5 cents per share.

The company concluded new engagements with more than 140 new customers and expanded engagements at more than 240 customers.

New customers include 3M France, Advanced Financial Solutions, Arivia.Kom, Aviva Vida y Pensiones Sociedad Anonima, BBC, The Boeing Company, Eisai, Empresas Publicas de Medellin, First Consulting Group, GlaxoSmithKline Research & Development, The Gillette Company, Golden Pages Israel Limited, Iberia LÌneas AÈreas de EspaÒa, KOS Pharmaceuticals, Messe Muenchen, MIMOS Berhad, Minnesota Mining and Manufacturing, Nissan North America, Peoples Bancorp, The Pep Boys, Retevision Movil, Royal Caribbean Cruises, Royal Mail Group, Schufa Holding, Schlumberger Sema, SGL Carbon, Siemens Business Services, OHG; Stadt Koln, SWX Swiss Exchange, Tractebel North America, Video Monitoring Services of America, and Woori Finance Information System.

Existing customers that made significant reorders include Abbey National, Aventis Pharma Deutschland, Bank of Montreal, Blue Cross & Blue Shield of Florida, Boehringer Ingelheim Pharmaceuticals, Cisco Systems, DHL Worldwide Express, Dresdner Bank, Echostar Communications Corporation, General Services Administration, Health Net, Hershey Foods Corporation, Intuit, Leeds City Council, Lexmark International, London Electricity Group, National Australia Bank, Novell, NTT Data Corp, Perrier Group of America, Putnam Investments, Rabobank Nederland, Reckitt Benckiser, Reuters, Standard Bank of South Africa, Standard Chartered Bank Hong Kong, Staples, Unilever Bestfoods Deutschland, and Zurcher KantonalBank.

Over the last year Siebel Systems shares have lost 78% of their value. Now that the company appears to be stabilizing, is there any chance that they have been oversold?

Paul Wahl To Leave Siebel Systems

Paul Wahl, Siebel Systems' President and Chief Operating Officer, will retire at the end of the first quarter. Wahl joined Siebel Systems in May of 1999 to manage day-to-day operations related to IT, engineering, product marketing, customer service, and professional services. His direct reports will now report to Tom Siebel.

"My tenure at Siebel Systems has been the professional experience of a lifetime," said Wahl.

Employing Wahl became one of main triggers of a predatory hiring practices suit SAP filed (See Issue 22 SAP Sues Siebel). Wahl worked at SAP for seven years as a member of the executive board. As head of SAP America he managed an increase in revenue growth from $650 million to $2.2 billion in just three years. Wahl left SAP to run the internet security firm TriStrata (RIP). The suit was later dismissed.

Ironically Wahl left the executive team of SAP when it began to face problems similar to those Siebel Systems struggles with today.

Tom Siebel Does the Right Thing

Tom Siebel relinquished four years of options worth $56 million, according to Securities and Exchange Commission documents. The 26 million in stock options he surrendered cuts his stake in the company from 14% to 11%.

Many investors, particularly institutional investors, have criticized the quantity of options the company has given to it employees. (See Issue 105 A Modern Love Story.). This move should cut the legs out from under the suit Grant & Eisenhofer filed on behalf of the Teachers' Retirement System of Louisiana, alleging the company failed to properly account for stock options given to Tom Siebel and Paul Wahl.

Tom Siebel's compensation from Siebel Systems for the last two years is now exactly $1 - although he remains one of the richest people in America. In an era in which corporate leaders have been widely vilified for their greed, this was the right thing to do. Mr. Siebel should be applauded for it. He sets an example for other technology leaders, like Larry Ellison.

Microsoft CRM Launches in North America

Microsoft Business Solutions (Nasdaq: MSFT) has released the much anticipated Microsoft Business Solutions Customer Relationship Management (Microsoft CRM) product. Targeted at the mid-market, Microsoft CRM "enables businesses to take advantage of technology and related services that were previously reserved for large enterprises with big IT budgets," according to the press release. The Standard Edition will be available to reselling partners through Ingram Micro. The Professional Edition will be distributed and implemented by CRM-certified reselling partners beginning today.

Helen of Troy had a face that launched a thousand ships. Microsoft CRM has an interface that has launched a thousand research reports. The product is accessible both as a browser-based application and through Microsoft Outlook. Given the millions of users who are already familiar with Outlook, this gives the product a substantial advantage out of the box. Microsoft CRM is also the first Microsoft business application built on the Microsoft .NET infrastructure. The product also has a low price point. Retail pricing for Microsoft CRM ranges from $395 per user for the standard edition to $1,295 per user for professional edition.

These three facts have caused Microsoft CRM to hang over the CRM market like the threat of nuclear winter since an analyst leak forced Microsoft to announce the product last spring. Given the enormous amount of speculation, it is difficult to imagine that the current release of the product will meet everyone's expectations. Most software takes three releases before it is stable enough to run in a production environment and there is no reason to think that Microsoft CRM is any exception to this rule. The product is in its first release and is based on an entirely new infrastructure. Like many products, Microsoft CRM looks best in the shinny wrapper at the store. How customers fare when they take it home and start to use it is likely to be a story for many years to come.

Microsoft CRM is available today only in North America. Localized versions of Microsoft CRM for the Europe and Middle East, Asia-Pacific, and Latin America markets are being developed and are scheduled for release in the second half of 2003.

Forrester Research To Acquire Giga

Forrester Research (Nasdaq: FORR) has agreed to acquire Giga Information Group (OTCBB: GIGX) for about $50 million. The acquisition will make Forrester the second largest advisory services firm after Gartner Group.

"The value of this deal is clear," said Chris Selland of Reservoir Partners. "Gartner and Forrester are the top tier research firms."

The technology research and advisory industry has been hit in recent years with declining reputations, revenues, and stock prices. Most observers expect this trend to continue as the industry adjusts to the impact of the internet on its core business - selling insightful and objective advice.

"This deal will help consolidate the industry," stated George F. Colony, Forrester's Chairman and CEO. "Giga has deep and strong research in IT. During the technology recession this type of research has had high persistence in accounts."

Gideon Gartner, Giga's founder and owner of 17% of its outstanding stock, has agreed to the offer, but will not play a part in the management of the new company.

The move creates a stronger competitor to industry leader Gartner Group (Nasdaq: GIGX) which recently reported total revenues were down 6% for 2002. Yet even after the acquisition, Forrester Research will be only 1/6 Gartner's size. The company is profitable, but its price to earnings ratio is a heady 176 today.

The big question for the industry after the acquisition is: where does this leave Aberdeen, AMR, and Yankee Group?

Aspect Contact Server Validated with Siebel 7

The Aspect Contact Server version 5.1 and Siebel 7 has been successfully validated. Joint customers can now provide their customer sales and service representatives a greater variety of data and call control capabilities within their Siebel applications. The Aspect Adapter for Siebel 7 populates an agent's Siebel screen with customer information when a call is routed to that agent.

The integration uses the Siebel Adaptive Computer Telephony Integration (CTI) interface to provide call management capabilities through the Siebel Web client. Aspect's solutions allow companies to match contacts with internal information and route the contacts to the appropriate resource.

"Aspect is very well recognized in the call center," said Simon Lonsdale, Vice President of Technology Alliances at Aspect Communications. "People want to take the risk in their business, not their infrastructure."

Founded in 1995, Aspect Communications Corporation (Nasdaq: ASPT) has over 8,000 implementations deployed worldwide. Two-thirds of the Fortune 50 use Aspect Product to manage more than 3 million customer agents. The company is headquartered in San Jose, CA and has offices around the world. A good contact at the company is Herve Danzelaud, Strategic Alliances Manager at Herve.Danzelaud@Aspect.com or 408-325-4131.

Apropos Validated with Siebel 7

Version 5 of the Apropos multi-channel Interaction Management suite has been successfully validated with version 7 of Siebel. The integration of Apropos with Siebel applications provides intelligent automation to prioritize, route, and escalate incoming interactions in real-time, within the Siebel 7 client. Customer service representatives can handle these interactions using the Siebel Communications Toolbar.

The integrated solution supports voice and e-mail channels and provides opportunities to improve call center agent efficiency and effectiveness, and to increase customer satisfaction and profitability. Contact center managers can better manage, monitor, and report on contact center and customer management activity.

Apropos Technology (Nasdaq: APRS) has its headquarters outside of Chicago in Oakbrook Terrace. It has over 300 clients worldwide. In 2001, Apropos was recognized through several industry awards, including Product of the Year from Customer Interaction Solutions and the 2001 TMC Labs Innovation Award. Apropos also was named to the Deloitte & Touche Technology Fast 500.

How to Choose the Right ASP

Many companies are now considering and adopting the outsourcing of their enterprise CRM applications to lower cost and improve the quality of production support.

USi pioneered enterprise CRM outsourcing with Siebel Systems in 1998. In the past four years USi has hosted and supported more Siebel Systems clients than any other ASP. This technical article clarifies the challenges of implementing production support best practices while maintaining cost control, and provides clear metrics to compare outsourcing options for enterprise CRM solutions like Siebel eBusiness Applications. To read further, click here.