TCO takes priority over functionality, says Siebel

Siebel wants to put total cost of ownership (TCO) at the top of the CRM agenda, according to Chief Executive Officer Tom Siebel during his keynote speech opening Siebel's annual customer conference, in San Diego.

Siebel said he has told his engineers to spend this year looking at how to lower costs rather than add functionality. This is not the first time such comments have been made - last year, he told customers that Siebel would cut its TCO by 50 per cent; in Siebel's tests. That didn’t happen though. "I set out to reduce TCO by 50 per cent," said Siebel. "We didn't quite get there, but 39 percent is pretty darn sig-nificant."

The next core product upgrade - version 7.7 is on track for the first half of 2004, but it is unlikely that a full blown overhaul will appear for some time yet. "This is not something that's going to be replaced next year with a version 8," said Siebel. "We see this as a product architecture with legs."

Siebel also insisted that the company remains focused on CRM. "We're doubling down on CRM," he said. "What part of the CRM market are we interested in? Every part of it. "This is a new era for CRM. We must provide the hybrid solutions that meet the requirements of a distributed business model. CRM today means very different things to people in different industries." "

He also discussed the company’s decision to get back into the hosted CRM applications sector following the demise of the 1999 venture in 2001. "We were pioneers in this space, ahead of the rest of the market, but the market wasn't there yet," he said. "It looks like the market is here now. It'll be a nice little business for us.”

He said Siebel CRM OnDemand would scale up to 50,000 users and would cost less than one-tenth of Siebel's traditional software. "It'll be very functional, there's nothing trivial about it," Siebel said. "It will have more functionality than we had in our enterprise products not too long ago."

But the company will still offer traditional enterprise licensing. "We can allow you to mix and match as your business needs require with a whole range of licensing models and product for any type of users in any industry,” said Siebel.


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