It's not a particularly encouraging start to a question and answer session when the centre of attention opens by outlining all the things he's not prepared to talk about. But given that the last time Tom Siebel answered questions from analysts he ended up with a quarter of a million dollars fine from the Securities and Exchange Commission, perhaps it's forgiveable.
That didn't stop analysts grumbling that Siebel's list of 'won't talk abouts' wiped out most of the interesting questions they wanted answers to when he sat down for a mid-quarter discussion session this week. Nonetheless there were some interesting positioning statements from the CRM market leader and a hint at potential future conflict with one of its most publicised partners.
Much of the discussion focused on the company's return to the hosted applications market with both its CRM OnDemand initiative with IBM and the acquisition of UpShot. "Interest has been nothing short of overwhelming," declared Siebel, but added the number of beta customers for the offering to his list of topics that were not on the agenda. “It has exceeded our expectations in every respect.”
Siebel did say that 50,000 visitors have looked at a joint Web site on the product built by Siebel and IBM and that the company reckons to have more than 11,000 leads. He added that BT would sell hosted CRM in the UK. CRM OnDemand is generally available from next week. “IBM and BT are both huge customers and marketing partners for us,” he said. “We've been marketing in the UK very successully with BT and IBM. There is no conflict there.”
There's a lot riding on the hosted strategy. A previous attempt ended in failure after less than years. Meanwhile Siebel's traditional licence revenue has declined year on year for nine straight quarters. Competition from rivals such as SAP was increasing, admitted Siebel, noting that the two companies were going head to head in more pitches year on year.
But he shot down SAP's claims to CRM success. “SAP is a great company,” he said. “There's no doubt that they are without question the most successful company of the various suite vendors. But that said, we have all been hearing about SAP's new CRM offering since 1997. If anyone is aware of a large production SAP CRM site anywhere on the planet, please let us know of it because we're not aware of it.”
In terms of competion in the hosted space, Siebel said it was a familiar scenario for the company. “When we entered the customer service market, the number one was Vantive; when we entered sales automation, it was Aurum; when we entered marketing automation, it was e.piphany,” he said. “In every market we've gone into, there has been someone that was market leader.
“The hosted market looks very fragmented. There is no clear leader. Prior to our acquisition there wasUpShot and there's NetSuite. Then there are the Pivotals, Onyxs and the Saleslogix of the world. The market looks a lot like salesforce automation did ten years ago. We see it as an opportunity to come in, consolidate the market and establish a leadership position.”
A notable omission there was salesforce.com. Curiously for a man who famously – and erroneously – declared that there was no way salesforce.com would exist in a year's time, Siebel seems to have developed some form of selective amnesia about his rival. 'I don't know much about salesforce.com,” he said innocently. “From what I know they seem to have a good business and will achieve some success. There will be opportunity for two or three companies.”
And what of Microsoft, set to make its international move into the SME CRM space and likely to target the same customer as Siebel with UpShot. Microsoft is a partner of Siebel's, but there was a hint of trouble ahead. “If Microsoft becomes serious about CRM – and to date they haven't been – and given where we are going with hosted CRM in 2004-5, those two factors are likely to collide at the low end,” admitted Siebel.