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Siebel gets acquisitions fever

Two weeks after unveiling its own hosted software, the CRM market leader is buying out hosted provider UpShot. And that's not the only acquisition it made.

Siebel Systems Inc. hopped aboard the enterprise software acquisition bandwagon today, announcing plans to buy hosted CRM provider UpShot Corp. and a completed acquisition of Motiva Inc., an incentive management software maker.

Siebel will pay $70 million for UpShot in an all-cash deal. The board of directors for both companies approved the sale and it is expected to close next month.

UpShot, Mountain View, Calif., is a privately held application service provider that offers easy-to-use, quick-to-deploy hosted CRM software. It goes head to head with providers like San Francisco-based and is currently locked in a legal battle over which vendor can claim market leadership.

The timing of the acquisition is curious. It comes barely two weeks after Siebel launched Siebel CRM OnDemand, a hosted CRM partnership with IBM.

In addition to gaining UpShot's 1,000 customers and 100 employees, CEO Tom Siebel said "the advantage [to the acquisition] is it probably moves us a year down the learning curve."

Siebel said it will support both its own hosted CRM software -- available later this quarter -- and UpShot's, but eventually it plans to combine them. It will also design pre-built integration with its on-premise applications.

Sheryl Kingston, CRM program manager at Boston-based Yankee Group, said the move brings Siebel domain expertise and "shows they're serious."

"Siebel has a great track record for acquiring and integrating," she said. "There's no reason to think they're going to dismantle and abandon UpShot." Kingstone added that Siebel will benefit from UpShot's ability to integrate with Microsoft Outlook and Office suite, something missing in early demos of Siebel CRM OnDemand.

Naturally, competitors weren't as bullish.

In a statement, CEO Marc Benioff responded by calling Siebel "an unproven provider of CRM on demand who has killed the UpShot product line in favor of their in-house offering."

Terms of the Motiva deal were not disclosed but product plans were.

Later this quarter Siebel said it will incorporate Pleasanton, Calif.-based Motiva's technology into its own software for designing and managing incentive plans. Specifically, it expects Motiva's services-processing architecture and modeling environment to enable organizations to handle a broader variety of compensation plans across industries.

Among the benefits Siebel is promising are automatic graduation of sales professionals from one compensation plan to the next and management of variations in commission rates at different times in a financial period.

Today's acquisitions are merely the latest in a period of vast consolidation in the space. Just last week midmarket provider Pivotal Corp. announced it had been acquired and would merge with customer service vendor Talisma Inc. On the enterprise side, Oracle Corp. is continuing its battle to take over PeopleSoft Inc.

Siebel also reported earnings today, announcing it had lost $59.3 million, or 12 cents a share, in its third quarter.


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