Takeover speculation forces Siebel to promise workers' rights

With the IT industry in the grip of vendor consolidation, Siebel Systems has been forced to guarantee employee severance payments amid speculation the company could be acquired in the near term.

Last week the company announced a set of employee benefits that would come into effect if the company is acquired, a move Siebel US head office claims is necessary to "retain employees amid widespread speculation about the company's future."

The plans were part of a US regulatory filing which states that if employee benefits are not addressed it could adversely affect the company and its stockholders.

The package guarantees workers severance payments and continued healthcare coverage should the company be acquired; however, Siebel staff both in the US and Australia declined to comment further.

Frost & Sullivan senior analyst Foad Fadaghi said that regionally, Siebel isn't doing too bad and the filing will motivate sales staff.

This is necessary, he said, due to the long sales cycles associated with CRM.

"Siebel needs to engage in business sales for the next 12 to 18 months and to do this they need staff focused and this move protects employees," he said.

"In the Asia-Pacific region the CRM market isn't as saturated as North America and Europe.

"It is speculative, but my gut feeling is that it (Siebel) needs to grow the business, even if it is by acquisition ... while it seems business as usual it will obviously entertain the notion of acquisition. It is more likely to come from a large player like Oracle or Microsoft but not a company like Salesforce."

Both Oracle and Microsoft declined to comment on whether Siebel would make an ideal takeover target in the future.

The Australian search directory Sensis, owned by Telstra, uses Siebel 7 for market planning in its online product range.

Sensis chief information officer Chris Stevens said despite current market conditions, Sensis is not looking elsewhere and will not replace Siebel as a supplier.