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Siebel performs midmarket makeover

The enterprise CRM leader has changed the pricing and packaging of its midmarket software in hopes of drawing new attention.

Siebel Systems Inc. today turned its attention to the midmarket -- renaming, re-pricing and repackaging its software tailored for the sector.

Siebel CRM Professional Edition replaces the old MidMarket Edition. It gives companies core sales, marketing and service functionality but also allows them to choose six options from a menu of additional features that includes forecasting, knowledge management and e-mail response capabilities.

In essence, [customers] were paying for more than they needed, and the things they needed in detail, they didn't get.
Kevin Nix, Siebel's group vice president of CRM and industry applications,

Professional Edition also comes in vertical flavors. Siebel rolled out financial services and communications versions today; it plans to tackle other markets later.

Siebel also trimmed its prices. Professional Edition costs $995 per user; the old MidMarket Edition had a list price of $1,200.

"In essence, [customers] were paying for more than they needed, and the things they needed in detail, they didn't get," said Kevin Nix, Siebel's group vice president of CRM and industry applications.

Wendy Close, CRM research director at Gartner Inc., said the changes were overdue because MidMarket Edition's total cost of ownership could be as high as $12,000 per user -- with hardware, licensing fees and professional services.

"Overall, their messaging is becoming more in line with what we want to hear as a small and midsized business. Now we have to say, 'can you prove it, Siebel?'" Close said.

Close is advising current MidMarket customers to ask Siebel to renegotiate their maintenance agreements based on these lower prices. Nix said that most current deployments would not see significant maintenance savings.

In a separate announcement, Siebel also said that its Universal Application Network (UAN) would support BizTalk Server 2004, the latest version of Microsoft's business applications integration software, which was released today. UAN is made up of prebuilt applications for automating business processes.

Siebel rolled out 15 processes to run with BizTalk 2004, including customer life cycle management, billing management and pricing management. By running UAN and BizTalk, for instance, companies can centrally manage customers with multiple accounts stored in different billing engines. The processes added are tailored for the communications, media and energy industries.

Siebel already supports other integration servers -- notably IBM's WebSphere, BEA's WebLogic and Tibco's business integration platform -- but the company said BizTalk 2004 is a less costly option.

"We have a midmarket opportunity, absolutely," said Nimish Mehta, Siebel's group vice president of UAN.

Though Siebel has deep roots in the enterprise space, it has recently made a play for smaller customers. It has billed its newly launched hosted offering as a good CRM entry point for smaller companies or for divisions within larger firms. Gartner has said that vendors have a big opportunity in the midmarket because only about 20% of companies in the sector have implemented CRM software.


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