Siebel stares down competition from ERP vendors

Siebel Systems’ decision to move version 7 of its CRM software from client/server to a Web architecture comes just in time, an analyst says.

Siebel is receiving increased pressure from competition, particularly from companies offering ERP (enterprise resource planning). That includes PeopleSoft, Oracle, SAP and J.D. Edwards.

IDC Canada analyst Warren Shaiu, noted that other CRM vendors like PeopleSoft have already developed applications based on Web architecture. “This is really important for Siebel to do this,” he said.

J.D. Edwards and Siebel pursued a two-year partnership to sell joint solutions, but that recently came to a close. J.D. Edwards has since bought CRM vendor YouCentric and will offer those solutions to its customers. PeopleSoft also acquired its way into CRM when it bought Vantive in 1999. PeopleSoft’s CRM 8 suite was launched earlier this year.

Peter Reeve, sales consulting manager for Toronto-based Siebel Systems Canada Ltd., said the company is undeterred by the recent appearance of ERP vendors in the CRM space. “We do what we do extremely well and we know that ERP vendors do ERP extremely well — The whole strategy behind Siebel is integrating with your existing systems,” he said. “We can’t prevent what ERP vendors are going to do.”

The problem facing Siebel, however, is that ERP vendors will be able to sell CRM solutions already integrated into back office software. Siebel has 23 per cent of the CRM market in Canada, according to Shaiu, with other large vendors taking up no more than 5 or 6 per cent a piece. As such, Siebel is unlikely to lose its market position in the short term, but could experience serious pressure in the long term, said Shaiu.

Siebel has branched out slightly further with version 7 of its software by including ERM (employee relationship management) and PRM (partner relationship management) applications, but that doesn’t mean a shift in focus for the company. ERM and PRM are essentially taking a customer approach to employees and partners, said Reeve.

Also new for version 7 is a smart refresh feature — individual fields may be refreshed rather than the whole Web page, cutting down on network traffic. The Web architecture also allows users to compile data from ERP applications and Web portals, such as Yahoo Finance, on the same page.

Siebel has also increased its mobile coverage, announcing a version of Siebel 7 for Palm Pilots and support for WAP, HTML, XML, SMS and SMTP.

Other CRM vendors may be nipping at Siebel’s heels, but a report called Multi-Function CRM Software: How Good Is It? suggests many of the major CRM vendors are scoring low on customer satisfaction. Siebel, Pivotal, Onyx and PeopleSoft scored average in a online poll; Goldmine and SAP scored below average; and Oracle scored much lower than average.

“We’ve had a features and sometimes even a bells and whistles race where vendors are making the packages more and more complex,” said report author Dick Lee, a principal with High-Yield Marketing. “The problem with that is the user only uses a small percentage of the functionality.”

But once a CRM implementation is installed, customers are loath to switch because they are so highly complex, said Shaiu. That could factor into ERP vendors’ favour, since they’re able to leverage their existing customer relationships to sell them CRM solutions.

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Jim Love, Chief Content Officer, IT World Canada

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