Siebel banks on hosted, vertical apps

Under fire from large competitors, Siebel Systems is looking to offer increasingly robust hosted CRM (customer relationship management) applications as well as hybrid implementations of on-premise and on-demand software to win market share in the business applications market, according to David Schmaier, the company's executive vice president.

Siebel has seen increasing competition as major ERP (enterprise resource planning) companies such as SAP and Oracle branched out into its core market, enterprise CRM, over the last few years. Now Siebel itself is branching out, and is banking on capturing a big part of the market for hosted CRM applications, said Schmaier in an interview after his keynote address at CeBIT America.

"We see hosted (CRM) applications as an increasing part of our business and our goal is to capture 50 percent of that market," Schmaier said, though he declined to give a time-frame for the goal. Siebel now has about 1,400 hosted CRM customers after selling its hosted software for only two quarters, compared to 4,000 customers for its enterprise on-premise version, he said.

"We're a big guy getting into a market with a lot of little guys," Schmaier said, speaking of the company's entrance into the hosted CRM market.

Not all of the features of the enterprise version of Siebel CRM are available via the hosted version, he said. "That's by design. We can turn on the features whenever we want to ... as the demand arises. This is classic new-market opportunity strategy," he said.

Siebel is also counting on industry-specific versions of its CRM software to strengthen its hand against hosted-software competitors that have been in the market for several years, he said. Earlier this month, Siebel announced that by the end of the year it would offer hosted versions of eight of the 23 vertical-market versions of its software.

The Siebel CRM OnDemand -- Industry Editions, to be available by the end of the third quarter, includes  insurance; high tech; automotive; and communications and media packages. Editions for financial services, life sciences, manufacturing and consumer goods will follow by the end of the year, according to the company.

Siebel's ability to provide both on-premise and hosted versions of its applications also will help the company meet a growing trend on the part of users for adoption of hybrid deployments, Schmaier said.

"In a hybrid deployment, you might have a company implement on-premise, enterprise CRM in its call center, which gives you all the advanced analytics of the enterprise system. Meanwhile, to quickly get its worldwide sales team ramped up on CRM, it can implement hosted CRM, which has the advantage of speed, and lower cost," Schmaier said in a keynote address at CeBIT. "Once you deploy hosted CRM, you can eventually bring over all your data into an on-premise enterprise CRM."

Siebel now has a few hundred companies that have deployed hybrid on-premise and on-demand systems, he told the IDG News Service after his keynote.

Most of Schmaier's keynote was devoted to the oft-noted corporate problem of "silos of information," which CRM is designed to combat. Different divisions of companies use different systems to capture customer data, with the result that they have "a thousand points of light" on a customer, but not a clear image of who their customers are, he said. "The different systems capture different data and may even have different versions of the data, spelling someone's name slightly differently, with some information out of date. This makes it hard to upsell or cross sell products from different divisions to the customer."

Though ERP and CRM vendors have been talking about these types of problems for years, it still exists, according to one keynote attendee.

"We're looking for a CRM product, we want give our sales and marketing folks a central window onto the customer, with the ability to get at all the various spokes of information that might now be in different places," said Robert Rohr, director of sales and technical operations at Kodak Polychrome Graphics in Norwalk, Connecticut. "This might be an old problem, but companies still have it."

Introducing Schmaier, Tim Bajarin, president of Creative Strategies, said that the originally scheduled speaker, Siebel Chairman Tom Siebel was unable to attend due to "an unfortunate incident" but Schmaier sought to quash any idea that the company had trouble with a customer by telling reporters after his keynote that Siebel had "a commitment with a customer ... there's no problem, let's not blow this out of proportion."

Mike Lawrie, appointed earlier this month to take over Siebel's role as chief executive officer, is spending a few months traveling the world to meet customers and will probably avoid making many keynote-speech appearances during that time, Schmaier said.

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