Competitors Pick Up Pieces After Siebel Closes Sales.com

The division offered Siebel's sales-automation tool as an online service for small and midsize businesses to use. Siebel closed it to focus on more profitable projects, though it would not disclose numbers.

Closing the "poor-performing hosted app leaves [Siebel's] MidMarket Edition products open to unfavorable comparison," wrote Bob Catham, a CRM specialist at Forrester Research, in a recent report.

Although Siebel stopped its online service, other CRM vendors are adopting the plan. Oracle revamped Oracle.com and turned its attention to smaller customers. Another new threat is salesforce.com, a Web-native application company that features an online CRM service for midmarket clients. Neither a software company nor an ASP, salesforce.com has received praise from Forrester and Gartner Dataquest, among others.

Despite the fall of Sales.com, Siebel officials say the company has made significant strides building its midmarket business in the past year. "I think our penetration is meeting our expectations," says Bill Van Orsdel, manager of channel business development at Siebel. "We have a telesales group that has established fantastic dominance in the midmarket."

Others, such as Interpath chairman and CEO Joel Schleicher, disagree. Interpath, a Research Triangle Park, N.C.-based ASP, was working on forming an alliance with Siebel at press time, but Schleicher (featured in "Redefining Customer Care," page 57) believes Siebel is centered on Global 1000 clients and can't provide smaller customers the same kind of scalability and customization offered by Pivotal, which offers CRM hosting and solutions with Interpath.

"Siebel is a great company out there on the cutting edge, but it just doesn't fit in the midmarket," Schleicher says. "It doesn't understand the market. It's a different sales process."