Deals with drug makers just the latest for Siebel
PALO ALTO, Calif., June 20 (Reuters) - Sales and customer service software giant Siebel Systems Inc. (NasdaqNM:SEBL - news) on Wednesday said it had added drug makers Bayer AG and Boehringer-Ingelheim Canada Ltd. to its expanding customer list.
The announcements came on the heels of several deals in June and amid heated competition in the customer relationship management (CRM) segment that Siebel dominates.
Bayer bought Siebel's ePharma, sales and eConsumer Goods products. That software is expected to enable Bayer's sales, service and marketing arms to share information about customers and transactions so they can seize sales opportunities and deliver effective service, Siebel said in a statement.
Boehringer, which installed ePharma, also plans to add Siebel's eClinical software that manages clinical trial logistics and its eMedEd product that manages Web-based medical events and education, Siebel said.
This month, the software maker also signed deals with the investment banking division at Morgan Stanley (NYSE:MWD - news), Swedish car maker Saab and Australia's AMP Financial Services.
Competitors Microsoft Corp. (NasdaqNM:MSFT - news), SAP AG , Oracle Corp. (NasdaqNM:ORCL - news), and PeopleSoft (NasdaqNM:PSFT - news) are targeting Siebel's key CRM business and making a push into another sector where Siebel is working to expand -- government.
On Tuesday, Siebel said the state of Michigan had chosen its software to automate systems that manage citizen and customer questions and problems over the telephone, via e-mail or the Web, and in person.
The company in June demonstrated its growing public-sector emphasis with three appointments.
Marc Racicot, Montana's former governor and attorney general, joined Siebel's board of directors. Michael Maibach, former vice president of government affairs for Intel Corp. (NasdaqNM:INTC - news), became Siebel's senior vice president of government affairs and James McGuirk, who had headed the worldwide public sector division at Unisys Corp. (NYSE:UIS - news), was named vice president of federal sales.
Siebel was not immediately available for comment.
Siebel shares -- bucking a broader rise in software stocks -- were trading $1.06 lower at $40.84 in midday trade on the Nasdaq.
########################################
Read bold type only in following story if you're uninterested in Nortel's struggle
###################################
Nortel runs for cover
By Scott Morrison in Toronto
Published: June 20 2001 03:23GMT | Last Updated: June 20 2001 03:36GMT
ft.com
A year ago John Roth said his biggest challenge would be to maintain control of Nortel Networks as it grew into a US$40bn-a-year concern.
Now the chief executive is focused on downsizing the Canadian networking group so it can break even with revenues of US$20bn.
The dramatic reversal in Nortel's fortunes was highlighted last week when it said it expected to report a US$19.2bn loss in the second quarter. Much of the loss was due to a write-down of goodwill accumulated during an expensive acquisition spree.
The write-down is part of a dramatic restructuring that will see Nortel cut one-third of its workforce in response to an unprecedented slowdown in telecommunications equipment spending.
Nortel may have a plan, but analysts say it is not at all clear that it will be able to execute it. The most pressing question for the embattled company is whether it will have enough cash to get through the year. The outlook is not very encouraging, according to the analysts.
Mark Lucey, analyst at TD Securities, says that given Nortel's US$4.5bn in credit facilities, the company could - in the best case - have a cash cushion of US$1.5bn by the end of the year. At worst, Nortel's legroom could be down to a mere US$200m.
"In a worst-case scenario, Nortel has very little room for error, being forced to go almost all the way through existing credit facilities," he says.
Tim Luke, analyst at Lehman Brothers, is one of several company watchers who suggests Nortel may need to tap the market for further credit facilities in the second half of 2001.
The primary difficulty in forecasting Nortel's liquidity situation is the inability to estimate revenues.
Nortel has been particularly vulnerable to the telecoms spending downturn, given that demand for long-haul optical systems, the company's key market, has been particularly hard hit.
"I don't think Nortel is going bankrupt, but there is a risk if they fail to execute [their plan] properly," said Paul Sagawa, an analyst at Sanford Berstein.
Many observers suggest Nortel is likely to cut even more staff later this year as it moves to dispose of further business lines.
This is most likely to include its customer relationship management software unit or its enterprise division.
But it is not clear there will be demand for these units unless Nortel is willing to part with them at a deep discount.
While Nortel's cashflow issues are an immediate concern, they also present long-term challenges as Nortel attempts to focus on its core businesses of producing metro and long-haul optical networks, as well as wireless network infrastructure.
Observers say it will be crucial for Nortel - as it tries to cut spending to the bone - to make the right bets on research & development investment so it will have the products customers want once the spending taps are turned on again.
Mr Lucey cautions that Nortel's next-generation, 40 gigabyte, long-haul optical networking system is in danger of being a stranded investment because customers are not likely to buy the new systems for another year or two.
Meanwhile, rivals such as Ciena are benefiting as carriers add channels to existing fibre-optic systems. Nortel is also under pressure to compete with smaller, more nimble competitors in the metro optical networking segment.
Nortel's ability to deliver cutting-edge 3G wireless infrastructure systems could also be constrained by the company's cashflow concerns.
UBS Warburg notes that while Nortel has a 7 per cent market share in third generation contract announcements to date, it remains far behind Nokia and Ericsson, which have 30-35 per cent shares. More notably, UBS said it was concerned that Nortel appears to be about 6-12 months behind its rivals in deploying trial operating systems.
The air of uncertainty surrounding Nortel, as well as the 90 per cent plunge in its share price since last year, have prompted unlikely suggestions that the company could become a takeover target.
But other observers believe Nortel has the ability to cut costs, remain competitive and stay ahead of the technological curve.
"They have big customers and strong technology. They have the potential to get out of this," says Mr Luke. |
