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Siebel User Week: Gates details Microsoft-Siebel partnership

Microsoft chairman Bill Gates outlined an expanded partnership with Siebel that calls for the companies to work together to develop the CRM market leader's software for the .NET platform. The announcement put an end to widespread speculation that the companies might forge even closer ties.

LOS ANGELES - Speaking to attendees of CRM software maker Siebel Systems Inc.'s annual user conference, Microsoft Corp. chairman Bill Gates promised that an expanded partnership between the two firms will aid users in building future business applications.

The deal calls for Siebel to spend millions of dollars developing and marketing its software on the .NET platform with the help of Microsoft. For its part, Microsoft will also create a version of its BizTalk integration server that is compliant with Siebel's Universal Application Network integration tools.

San Mateo, Calif.-based Siebel is betting that the strategic alliance will allow it to more rapidly deliver XML-based Web services built around Microsoft's .NET architecture. The announcement scuttled rumors leading up to the show that Gates's company would take a minority investment in Siebel or that Siebel might sign on to distribute Microsoft's own mid-market CRM software, which is due out before the end of this year.

"Business applications are moving into a new phase when software platforms will work more closely together," Gates said. He added that the expanded agreement with Siebel establishes a foundation for Web services applications that leverages unstructured data found in Microsoft Office software, including information in the Outlook e-mail client.

Gates showcased the promise of the partnership by rolling out endorsements from big-name customers such London-based telecommunications behemoth BT Group PLC, formerly known as British Telecom. He said that many Siebel CRM customers have already standardized on Microsoft platform technologies such as its SQL Server and BizTalk.

Siebel customers attending the conference supported the idea of the expanded partnership, despite some users' belief that the pact might not bear fruit immediately. Peter Lalor, a relationship management services executive at AMP, a Sydney, Australia-based financial services provider, found it encouraging that Siebel is pledging integration support.

"Stronger integration between vendors like Siebel and Microsoft will always be an issue," Lalor said. "While you may have been able to work it out on your own, it does make Siebel seem like an even safer alternative."

AMP has built an "e-channel" portal to help tighten bonds to the financial planners that sell its annuities services, he said.

Jeff Howren, manager of sales information at pharmaceutical giant Bayer Corp. in Morristown, N.J., said that the tighter linking to Microsoft "puts more muscle" behind Siebel's CRM strategy.

"When the kind of interaction [Microsoft and Siebel] are promising will be possible remains to be seen, but it sounds like a solid concept," Howren said.

Other Siebel users said they didn't see the partnership as a guarantee of any major leap forward in terms of functionality but thought the deal lends greater long-term viability to the vendor's CRM products.

Among the first benefits of the pact, according to Siebel, would be joint development of its sales, marketing and service applications on .NET and the creation of a single point of interaction for joint customers of the two vendors. The companies also reported that some 100 engineers from both sides would move into each other's software labs.

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