IBM and Siebel in CRM-on-demand pact


3 Oct 2003

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IBM and Siebel have joined forces to introduce a new on-demand hosted customer relationship management (CRM) services called Siebel CRM OnDemand. The move will see small and medium-sized businesses being offered the service for a monthly subscription of US$70 per user at www.crmondemand.com.

The alliance represents a curious reversal for Siebel, whose CEO Tom Siebel dismissed the internet subscription model for CRM two years ago after the failure of a venture called sales.com.

In 2000, as part of efforts to boost the performance of its sales and marketing organisation, IBM deployed Siebel’s CRM technology internally.

Both companies, which have large workforces in Ireland, have now created a specialised sales force that will target the hosted CRM market and are about to launch a multimillion dollar integrated marketing campaign to boost sales of Siebel CRM OnDemand.

Acccording to IBM, customers using the CRM OnDemand technology do not need to license code and can use the product anywhere, at any time if they have a PC with internet access. The CRM OnDemand solution enables companies to start with a small CRM project, with zero start-up time, deploy rapidly and expand the system as needs change over time.

The aim of the technology is to allow firms to generate more sales leads and make the sales process easer and faster through lead qualification and management, sales forecasting and keeping an eye on customer service. It also provides sales, marketing and service professionals with information to quickly respond to business, customer and market events.

However, according to Gartner analyst Michael Maoz, the shift in to the SME market is an uncertain road for Siebel, one fraught with many pitfalls. “The offering extends Siebel’s reach to small and midsize businesses and could expand its presence among large Siebel customers. However, Siebel risks cannibalising its core revenue stream,” he said.

“Enterprises should benefit as Siebel’s return to the hosted market further validates a model best articulated until now by Salesforce.com. SMBs should place Siebel CRM OnDemand on their shortlist when evaluating CRM software. Siebel’s large customers should re-examine the feasibility of extending Siebel to parts of the organisation previously left out for budgetary reasons. (However, this could lead to some cannibalisation of Siebel’s future business.) The new offering’s encouraging features include the simplicity of the interface, the reliability of the hosting partner, rich functions and workflow, embedded real-time analytics, and built-in connections to back-office applications,” Maoz added.

“The vendors developed Siebel CRM OnDemand on Java 2 Enterprise Edition and WebSphere. It differs from the on-premises product but shares the same data model. Migration from one to the other will not be straightforward, nor are the costs to integrate with legacy applications defined yet,” he warned.

“Siebel CRM OnDemand will likely hurt Onyx and Salesforce.com. Onyx, the first to invest in a strategy with IBM for Onyx On Demand CRM, now appears left behind. Salesforce.com will need to respond to points where Siebel’s product is superior: embedded workflow, better integration (Siebel Universal Application Network) and the ability to upgrade to an on-premises application. In Gartner’s estimation, Siebel CRM OnDemand will slow the growth of Microsoft and Best Software in the SME market,” Maoz said.

By John Kennedy