Siebel in IBD-Staying Ahead of Oracle, SAP
Investor's Business Daily
Wednesday, January 10, 2001
Quiet Acquisition Helps Siebel Stay Ahead Of Oracle, SAP
By J. Bonasia
Investor's Business Daily
These days Siebel Systems Inc. is looking like an 800-pound gorilla in the jungle of online sales software.
Siebel, a business software powerhouse, has taken a prominent position in the market for customer relationship management applications, or CRM. These applications are designed to help companies deal with customers online and in actual stores.
Siebel's little-heralded October acquisition of OnLink Technologies Inc. rounded out its online sales software suite with a new program called EAdvisor, which advises customers on choosing products and services online.
Siebel says it now, for the first time, can offer interactive guidance and tailored recommendations that improve the online buying experience.
The company "became the king and undisputed winner in the CRM market" when it bought OnLink, said Tim Dolan, an analyst with Deutsche Banc Alex. Brown. He says OnLink's technology will help Siebel boost its sales to Fortune 500 companies.
Some industry watchers say that Siebel's Interactive Selling Suite, or ISS, is a comprehensive CRM package that gives the company a considerable lead over such rivals as Oracle Corp.
'Package' Deals
The ISS suite is "an important milestone for the company," said James Pickrel, an analyst with Chase H&Q. "This new release brings Siebel a higher level of functionality and integration."
Since its founding in 1993, Siebel has made its name as a top provider of software to automate corporate sales, marketing and customer support units. Now the company is expanding its CRM applications to customers that are moving operations online.
The ISS suite includes features designed to create accurate product prices for all sales channels, including the Internet, call centers and stores. A so-called configurator simplifies the customization of complex products and services to improve order accuracy within an organization. And a sales program computes taxes and shipping fees.
The pricing, configurator and sales programs were first shipped in May. Siebel recently added EAdvisor.
Customers can buy the programs separately or as a unit. Some analysts say no other major software maker offers a package that approaches the breadth of Siebel's suite.
The premise of ISS is to match a customer's needs to a company's offerings, says Larry Warnock, Siebel's vice president of marketing for ISS. He says Web selling should imitate real-life field sales.
"Most Web sites now assume you're an expert in understanding their products, but usually you're not," Warnock said. "Rather, you know what your needs and price range are. Our applications present products through this perspective."
Warnock says the goal of EAdvisor is to transform static Web-based product catalogs into interactive sales guides for customers.
"Salespeople don't just hand over a brochure and say pick something out," he said. "Our premise is to try to mimic this real face-to-face engagement."
Pickrel says Oracle's competing 11i e-business suite offers the core online store, product display and configurator features. But it lacks anything comparable to EAdvisor, he says.
PeopleSoft, SAP Still Trail
Another rival, PeopleSoft Inc., picked up its core Web sales technology when it bought Vantive Corp. in October. But it hasn't developed a comprehensive CRM offering.
And SAP AG has "fallen pretty far behind" in the race to develop a complete CRM package, Pickrel says.
In the past, companies bought separate software from different vendors for specific CRM needs and back-office tasks. Now, comprehensive suites are becoming more popular.
Siebel's call center software is still its top seller, but its fastest-growing product line is online CRM software. The typical ISS package starts at $150,000 for the software and costs another $300,000 for implementation and services.
The Siebel package helps customers interact with companies through many channels. Besides a Web site, the channels include physical stores and phone-in call centers. The CRM software aims to integrate all these channels.
"The tech sector is going in a massive downward direction," Pickrel said. "The market is telling investors that the Net and Web-focused business plans are still important, but they must be folded into the larger scheme of business."
Dolan of Deutsche Banc Alex. Brown agrees.
"The blowup of the dot-coms made people realize that the Internet is an important commerce channel, but not the be-all and end-all of business," Dolan said.
Dolan says Siebel is "light years ahead of Oracle," whose upgrade he believes is still months away from release. And he says SAP has yet to deliver quality software for sales force automation, a key facet of CRM.
In a November report, Dolan said delays have hurt Siebel's rivals.
"The reason that SAP, PeopleSoft and Oracle have not been major factors in the CRM market for the past two years is that they waited too long to make aggressive moves into the CRM market," he wrote. Siebel has the broadest product line "by far."
Siebel recently signed a $50 million deal with IBM Corp.
Other Siebel CRM customers include Ariba Inc., Boise Cascade Office Products Corp., Caterpillar Inc., General Electric Co., WorldCom Inc. and Mutual of Omaha Insurance Co.
Founded in 1993, Siebel reached $1 billion in annual sales faster than any other software maker, even Microsoft Corp. Analysts expect Siebel to report revenue of more than $1.7 billion for 2000, an 115% increase over 1999.
"If I had to put my money on any company in the software space, I'd put my money down on Siebel," Dolan said. |
