Tom's New Best Friend

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As we predicted last month, the great Siebel-Microsoft love-in kicks off next week in Los Angeles when Bill Gates and Tom Siebel manage to share the same podium to declare what can be seen as a non-aggression pact on the eve of Microsoft's big push into the CRM market.

We've been predicting for weeks now that Tom would finally climb off the fence and declare his undying support for the Microsoft's PowerPoint framework - AKA .Net, the strategy that in Microsoft CEO Steve Ballmer's own words will take three years to be fully realised in a Microsoft product.

The interesting thing is the scale of Siebel's submission to the Microsoft mantra. From what we understand, the 'new best friend' strategy will also require Siebel to introduce Microsoft to some of its biggest accounts - ("Come into the hen house, Mr Wolf, make yourself at home!") - although at least the company has now denied that it will take the Microsoft shilling in form of a so-far unspecified equity stake.

The sanity of the first action is up to Tom to wrestle with of course, but the equity stake took us by surprise. OK, things are bad, but surely Siebel doesn't need the money that badly? This was a bit of a PR mess really with Wall Street buying into the rumours all too quickly. I've had my criticisms of Siebel's US PR people before, but even I'd have given them the benefit of the doubt that they could spot trouble ahead on this one.

The small investor bulletin boards are still buzzing with over-excited - and stupid - speculation that Gates will be taking over completely in the near term. Somehow we don't see Tom being ready to vacate that CEO seat any time soon, but the presence of Microsoft as an investor would be leapt upon by rivals such as Oracle and SAP to suggest that Siebel is now an extension of the Redmond axis.

If Tom's enemies are sensible, they'll start to plant the idea that the sudden .Net conversion is indicative that Siebel's J2EE architecture is not flexible enough to keep up with user demand - at least one vendor is already floating this idea off the record while they screw up the courage to put their name to the comments.

For Bill, it's good news. The market leading CRM vendor, the one that in the eyes of most customers actually defines the market, rolls over to have its tummy tickled while the tickler prepares to stamp on its belly. We've said it before and we'll say it again: the idea that Bill is going to be content with the desktop and low-end CRM space is akin to saying that all Hitler really wanted was the Rhineland and had never heard of Poland. Straining the analogy, Siebel just auditioned for the role of Vichy France.

It'll be a fascinating experience watching the Tom and Bill show next week? Peace in our time, Tom? We somehow doubt it. All we'll say is that we've always found that when you wish to stab someone in the back, it's always best to get behind them first. Here's to new best friends!

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