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Technology Stocks : Siebel Systems (SEBL) - strong buy? -- Ignore unavailable to you. Want to Upgrade?

To: Trader Dave who wrote (3310)	2/13/2000 4:37:00 PM
From: Lee L.	Read Replies (1) \| Respond to of 6974

Hi TD, SEBL has the dreaded "perpetual licensing disease." I hate this problem, I hate the one time only sale with only moderate ongoing maintenance fees. If this is a problem, it won't manifest itself for years. Siebel does a good job of 'modularizing' its offering. A typical customer's first purchase will include base licenses plus a couple of modules. The success of an initial rollout only encourages the purchase of more product. As a Siebel customer, they really pissed me off by charging extra for new modules. As a single example (there were many), I remember when they released a module to allow integration to Outlook. They had talked this up for months, my sales guys were begging for it. When it arrived, it came with a $100 per named user charge. "Why the f**k do I pay zillions of dollars for maintenance? Why isn't this part of the base technology?" I would ask. "It's a new product, so its not included in maintenance" was the consistent retort. As their product grows and as customers continue to address new CRM processes, they are locked-in to give Siebel more revenue. The cost of these follow-on sales is practically nill. As a customer, I hated it. As an investor, it sounds like a good plan. Also, I wouldn't underestimate maintenance fees. This is pure gravy for them. In comparison, I was easily able to negotiate an enterprise product deal with Vantive in early '99 that protected me from these kinds of add-ons. I could have never negotiated such a deal with Siebel. When Siebel's product offering stops expanding and the CRM market matures, then we'll have a problem. We have several years until Siebel becomes the D&B of CRM.