You just signed a big contract with Hewlett-Packard. Would you say that 'mega deals' are coming back? Are CRM deployments going from being department-level to enterprise-wide?
I think they're growing. I'm not sure I'd predict that mega deals are coming back, but I think we're seeing more and more companies say, 'We want to expand our CRM implementation.' In other words, this is a deployment statement and not a statement about the financial size of our deals. Siebel already has a footprint in these companies, unlike our competitors, who are either point-solution vendors or ERP players trying to get a foothold in CRM. Times have been tough of late. What is Siebel's financial outlook?
We're not assuming things are going to come roaring back. We're not going to be economic prognosticators -- we're going to make sure we have the company at the size it is now to have a profitable company in this current economic climate. And if things get better, great. How do you get people who are doing custom CRM in house to move to a packaged solution? Does Siebel have a strategy for that?
About a year ago, we built an internal CRM strategy group, mainly comprised of former Booz Allen, McKinsey [and] PricewaterhouseCoopers folks who consulted for customers on how to approach CRM deployments. They go in and meet with companies that currently have homegrown CRM systems and walk them through the strategy, discussing the entire process -- from risks to shortfalls to budget fears, etc. And this is our first major touch point in developing an account. This is not a revenue-generating service, and it's a huge competitive advantage for us. People charge millions of dollars for what these guys are doing. If the trend is toward enterprise-wide CRM, why would a best-of-breed vendor be better positioned to handle that company's needs than a vendor that also offers ERP?
I think the notion that companies will buy everything from one vendor is a complete fallacy. There are homegrown systems and other challenges, especially now that there is a push for vertical functionality. We're currently selling about 85% of our licenses as vertical solutions. For us, the days of horizontal CRM are over. Were you surprised to see Oracle come out with a different approach to vertical CRM, one in which all industry-specific functions come embedded and customers can pick and choose what they need?
I think it's a very superficial approach to 'verticalization.' Our experts have a very deep understanding of vertical-specific business processes. People aren't really looking to buy packages anymore … they're looking to solve business problems and automate business processes. How do you deliver on that need?
For example, I had a long meeting with Cisco a couple days ago, and they wanted to know how we did marketing internally -- what our process is, how we're using our own product, where we are applying the analytics, etc. We share best practices in our customer discussions instead of us showing 40 PowerPoint slides on why our marketing analytics product is better than someone else's. But there is the expectation that these companies would become Siebel customers and generate revenue?
Yes, it's presales, essentially. Lately, there's been some discussion about the fact that your partner list is dwindling. Can you speak to the criticism that this is a sign that Siebel is becoming less of a factor?
I don't think our partner list has dwindled, necessarily; we've put a lot of investment into the global strategic partners. We have a long list of partners and certainly, over time, some of those companies have become less relevant in the marketplace. So we're continually looking to make sure our list is fresh. We're focusing on the partners that really drive successful installations.
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