Siebel, IBM May Team On Online Midmarket CRM
The two companies are talking about collaborating on an online, hosted CRM offering for midsize companies, CRN has learned. Two sources close to the negotiations confirmed that talks are under way.
IBM, Armonk, N.Y., would not comment. Siebel, San Mateo, Calif., could not be reached for comment.
The offering, slated to feature Siebel CRM, will be hosted by IBM Global Services, but partners will be able sell it and gain a revenue stream, sources said. In that regard, the planned offering will mimic an IBM/Onyx CRM offering announced in October as part of IBM's Deliver On Demand push.
At that time, IBM also announced hosted human-resource management solutions teaming with Employease, and hosted general ledger and accounts receivable applications with Intacct.
An IBM partnership could give Siebel--which has struggled in smaller accounts, especially since the dissolution of its Great Plains Front Office collaboration last year--a higher profile in that market. Siebel's game plan is to gain traction with small- and midmarket companies and fend off aggressive competition from Salesforce.com and other hosted CRM systems, said one source familiar with the plan.
IBM Senior Vice President Mike Lawrie, who heads up sales and distribution for the computing giant, is reportedly involved in the discussions as is IBM General Manager of Global Small and Medium Business Marc Lautenbach. Siebel Chairman and CEO Tom Siebel is directly involved in the process, the sources said.
News of the alliance comes at a critical juncture of Siebel, which is expected to announce large layoffs next week. Siebel's second-quarter earnings call is slated for July 22. Two weeks ago, the company said it expected to miss expectations for its second fiscal quarter. At that time, it forecast earnings per share of 2 cents per quarter on revenue of $330 million to $334 million. Consensus estimates had been about 3 cents per share on sales of $376.6 million.
While none of the enterprise software players are hitting the cover off the ball of late, Siebel's woes are particularly embarrassing, given Chairman Tom Siebel's 2002 boasting about his company's ability to see into its pipeline better than competitors because of its reliance on its own CRM software. "That visibility has apparently evaporated," one analyst quipped last year.
The company's inability to penetrate midmarket accounts, where companies appear to be spending more freely than their larger counterparts, is part of its overall problem, observers said.
"Siebel has to re-activate its midmarket strategy. They've disappeared," said Ishu Mirchandani, CRM Practice Manager for Knowledge Resource Group, an Indianapolis-based solution provider. Mirchandani had been a Siebel partner but now concentrates on Microsoft CRM.
Microsoft is spending millions to push its own low-end CRM offering into small and midsize businesses, but also into departments of larger companies where Siebel remains market leader, observers said.
Even Mirchandani acknowledged that despite its recent woes, Siebel remains a name to be reckoned with in CRM: "People still think Siebel is the big gorilla."
Getting Siebel in its stable could give IBM a boost in embedding its "bluestack" of software and middleware in third-party applications. J.D. Edwards now embeds the bulk of IBM's software stack--including MQ Series, Tivoli, Lotus and DB2 functionality--in some of its offerings.
For more on Siebel's evolving midmarket strategy, see CRN on Monday.