Siebel execs tout 7.7 release, CRM OnDemand growth

By Stacy Cowley, IDG News Service |  Software

Siebel Systems Inc. executives used a day-long meeting with analysts on Friday to reiterate many of the themes mapped out at Siebel's User Week conference in October.

Siebel's next major update of its core CRM (customer relationship management) software, version 7.7, is on track to ship within the next few months, and will be rolled out internally at Siebel this week, Executive Vice President David Schmaier said during a presentation.

The update will introduce several new offerings, such as a customer-loyalty application and new software for branch banking, along with feature changes aimed at lowering ownership costs. Thanks to tweaks in the software's installation, configuration, upgrade mechanisms and user interface, total ownership costs for 7.7 will be around 40 percent lower than for Siebel's initial 7.0 release, according to Chief Technology Officer Ed Abbo.

Siebel's CRM OnDemand hosted service has attracted several hundred companies and 20,000 users since its December launch, executives said. Schmaier emphasized that Siebel is targeting the product both at small businesses reluctant to build and maintain their own IT systems, and at departments of larger businesses seeking a fast deployment option.

Siebel's CRM OnDemand group is now being led by Mike Betzer, formerly the chief executive officer (CEO) of hosted contact-center service provider Ineto Services Inc., which Siebel acquired earlier this month. Betzer said Siebel will roll out updates to Siebel OnDemand on a monthly basis for the first half of 2004, as part of its bid to become the number-one vendor in the hosted CRM market. Salesforce.com Inc. currently holds that spot, with 120,000 users.

Betzer said he's confident Siebel will win market share through superior technology and the "insurance" it can offer customers by having an on-premise, enterprise product for them to grow into. Down the road, it may offer a trade-up program to help customers seeking to make that transition, he said.

"If this turns into a feature war, then that would be the best possible outcome for us, because we could just turn on every feature in Enterprise," Betzer said. "We don't think that's what this market wants. We think this market wants fast, easy, affordable."

Siebel Chairman and CEO Tom Siebel introduced the meeting and participated in an executive question-and-answer session, but otherwise stayed on the sidelines.

He fielded one question from the audience about Siebel's dedicated focus on CRM, a perennial concern for some analysts, who argue that for Siebel to grow it needs a broader product portfolio to challenge ERP (enterprise resource planning) vendors such as SAP AG and PeopleSoft Inc.

"Let's call a spade a spade. We are a suite vendor," Siebel said, citing his company's array of application modules and portfolio of vertical-focused tailored offering.

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