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Acquisition, leadership overshadow Siebel release

With acquisition rumors swirling, Siebel has had little to say about its latest release, despite a number of frustrated users.

While the sudden departure of Siebel Systems Inc. CEO Mike Lawrie set the CRM and financial industry abuzz last week, the vendor had little to say Monday about its latest release.

Lawrie's departure overshadowed Siebel's annual European User Conference, being held this week in Barcelona, Spain. On Monday, Siebel unveiled is version 7.8 product with advanced order management and embedded analytics capabilities. Siebel executives, however, were not available to comment on the release.

This despite the fact that not everyone was concerned with who is heading up the show in San Mateo, Calif.

"No, it doesn't matter to me," said Dave Hahmann, vice president of EMI Industries, a Tampa, Fla.-based food equipment retailer and Siebel customer. "Siebel hasn't fallen off the radar screen for me, but I have for them. We love the product, we're using it like crazy, but we've had no contact for at least two years. They've been terrible."

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Read about Lawrie's departure


See what one analyst said about the challenges Lawrie faced

Considering that Lawrie was brought in to bring a fresh face and new attitude to Siebel as it entered Chapter 2, Hahmann's experience may speak to Lawrie's dismissal. That Tom Siebel, the famously hard-driving founder of the company, remained as chairman of the board of directors, plus the company's recent quarterly forecast that was way below Wall Street expectations, likely didn't help either.

But the fact remains that Lawrie was touted by Tom Siebel as the perfect person to lead the company forward, as it recommitted itself to its customers and CRM success.

"All the news around Chapter 2, it just made Lawrie look ridiculous in my opinion," said Chris Selland, principal analyst at Boston-based Covington Associates. "He's talking about the new Siebel as the company is hitting the rocks. The timing was terrible."

Lawrie's sudden departure has left some customers who did meet with him with new questions of their own.

"We met with Mike a couple of times, worked with him on some things and we had satisfactory interactions," said Roger Morrell, vice president of IT for Infonet Services Corp., a Siebel customer in El Segundo, Calif. "I guess, from Siebel's point of view, we were existing customers, and it was more the new customers that were their problem. The discussions about Siebel being bought concern me."

A number of potential suitors have been mentioned since Siebel's disappointing quarterly forecast and Lawrie's dismissal, but if there was a natural fit to take the company over, it would have happened already, said Erin Kinikin, analyst with Cambridge, Mass.-based Forrester Research Inc. Oracle Corp. is already busy with its PeopleSoft takeover, and while Siebel could help SAP AG get into the services market, SAP would probably want to rewrite Siebel's code.

"Siebel is fundamentally the leader in a declining market," Kinikin said. "Siebel's big challenge is to get smaller so they can be profitable. There's nothing worse than a growth stock that's not growing. When the investors lose patience, then Siebel's got to look at other options."

Siebel has been facing increasing competition from SAP for enterprise business at the upper end of the market and from hosted CRM providers like at the lower end of the market. In fact, given Siebel's disarray, Kinikin said hosted CRM is looking more attractive.

"A hosted play is an awfully good option for a few years to see what happens to the market," she said. "Now's a great time to rent and not own."

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