IBM and Siebel Partner on CRM

In an effort to stave off co-rival Oracle, IBM and Siebel Systems on Thursday announced here a strategic global alliance to jointly develop and market end-to-end customer relationship management (CRM) solutions.

The deal, an expansion of the partnership that the two companies announced last spring, will result in a series of CRM applications that are designed to work hand-in-glove with IBM's DB2 database. The two companies will deliver versions of these applications for IBM server hardware platforms including the RS/6000, S/390, NUMA-Q, and AS/400.

The deal is not exclusive and does not preclude either company from striking similar deals with each others' competitors.

The move should help bolster both IBM and Siebel's competitive stance against database giant Oracle, which plans to announce a comprehensive CRM solution called Oracle 11i next year.

Siebel and Oracle CEO Larry Ellison have sustained a very public dislike for each other since ex-Oracle employee Tom Siebel left Oracle in 1990 to start up his namesake company, at which he still holds the position of chairman and CEO.

This antipathy was apparent at the launch, where Tom Siebel took a sideswipe at his former employers.

"I've been in this business a long time, and Oracle always seems to be two quarters away from delivering the world's greatest product," he said. "But they are not a factor today."

Earlier this month Siebel announced delivery of its existing Web-based front-office series of applications for IBM's DB2 Universal Database. Those applications help users manage and coordinate various point of customer interaction including the Web, call centers, and business partner channels Through the partnership, IBM will be able to fill the hole in its product line left by its decision to drop its own CRM applications division, called Corepoint. Corepoint was launched in mid-1998, and was built around IBM's acquisition of Software Artistry.

"We both realise that there is a large number of our clients that have existing relationships that we would also like to serve, " said Bill Etherington, senior vice president and group executive of the sales and distribution division at IBM. "IBM knew that turning [our existing CRM solution] Corepoint into the type of offering that Siebel had was beyond our capability."

IBM officials believe that IBM can strike effective deals with CRM companies such as Siebel because, unlike Oracle, IBM has no plans to compete against them.

"This is the major difference between us and Oracle is, we don't want to compete in the applications space with companies we have a partnership with. Oracle looks like it wants to be ultra-competitive there,'' said one IBM insider.

The core markets that the two companies hope to target are communications, finance, insurance, and consumer goods. Siebel will resell IBM's DB2 into certain markets and IBM will resell Siebel's CRM solutions as well.

Officials from both companies characterized the partnership as a reaction to demand from their customers.

"In the future, business people are not going to call the shots," said Siebel. "The customer is calling the shots. And we'll do business with them however they want to do business."

Ed Scannell and Dan Briody are InfoWorld editors at large.

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