Winner Takes All – Siebel Ousts SalesLogix

 During a Solomon Partner Conference in August, Great Plains, a leading mid-market provider of back-office and e-business solutions, announced a number of new product enhancements and/or product alliances for its recently acquired division and former archrival, Solomon Software. Notable announcements were the availability of new Distribution Modules for Solomon IV, the application hosting initiative for Solomon customers and the availability of Solomon Desktop, a browser-based portal.

However, the most remarkable announcement to our mind preceded the conference. In a July press release, Great Plains announced that it plans to integrate the Great Plains Siebel Front Office suite of eBusiness applications from Siebel Systems, Inc. with the Solomon IV product line to deliver a comprehensive, integrated, front and back office solution for Solomon customers. Great Plains Siebel Front Office for Solomon IV will possibly deliver the functionality, customization, ease of use, rapid deployment and pricing required by mid-market customers. This application will be available exclusively from authorized Solomon channel partners.

"Due to our recent acquisition by Great Plains, Solomon and its partners are now able to team with Great Plains and Siebel Systems to offer our customers a complete eBusiness solution more quickly than before," said Michael Rupe, president of the Solomon business unit at Great Plains. "By leveraging Great Plains' experience in assisting its partners to build their eBusiness practices, we can deliver more value, faster to Solomon IV customers and partners."

Siebel Systems has committed channel sales and telesales resources, marketing programs and funding, and regional product specialists to assist in developing, training and leveraging the joint Great Plains/Solomon partner channel.

"We are delighted to add the talent of the more than 500 Solomon channel partners to the Great Plains Siebel Front Office eBusiness initiative, as it will add substantial momentum to the already strong launch of Great Plains Siebel solutions," said Don Nelson, vice president and general manager of the Front Office group at Great Plains.

Solomon channel partners are eligible for immediate authorization to sell the Great Plains Siebel Front Office suite for Solomon IV, which includes sales, customer service, call center and Web-based solutions. Authorized Solomon partners can offer the suite as a stand-alone Siebel eBusiness solution or as an integrated front office/back office solution with Solomon IV, Premier and Select editions. The first phase of the integration between Solomon IV and Siebel eBusiness Applications is expected to be available in the fall.

Market Impact

Great Plains' biggest mission to accomplish during the Solomon Partner Conference was to allay any doubts in the minds of Solomon partners and/or customers regarding its genuine intentions to further invest in the Solomon product line. We believe that most of them were relieved since it became apparent that Solomon would benefit from following in the steps of its parent, particularly in terms of partnerships with Siebel Systems and Logility. The audience also witnessed the results of Solomon's continued internal R&D effort through the newly released functionality and through hints at synergistic R&D endeavors in the future as well as the leveraging of Great Plains experiences in developing internally its manufacturing functionality.

The decision to partner with Siebel, although apparently beneficial, was somewhat tricky in light of SalesLogix - Solomon IV CRM integration originally announced in March 2000 (See TEC News Analysis "Yet Another ERP/CRM Partnership") before it was acquired by Great Plains.

Shortly after Great Plains announced that it would acquire Solomon Software, Great Plains and Solomon team members began an extensive re-evaluation of Solomon CRM strategy that would offer its channel the best short- and long-term business opportunities. It became obvious that Solomon could leverage Great Plains' head start in integration and in assisting its partners to build their CRM practices to deliver more value and faster to Solomon IV partners and customers.

Had Solomon continued to partner with SalesLogix, it would have had to start from scratch to deliver integration, Solomon channel training and Solomon-specific marketing materials. Great Plains has already developed this expertise, and paved much of the way. In addition, the strength of the Great Plains-Siebel partnership (backed by the support of 75 dedicated and experienced Great Plains Front Office team members), Siebel's industry leading CRM position, its huge investment in R&D, and its specific commitments to assist Solomon partners in building this process (assistance in several key areas including marketing programs, product integration, business partner training and certification, and ramping the Solomon Technology Centers) all created an offer that was very difficult to refuse.

On the other hand, this alliance will allow Siebel Systems to further expand its mid-market position, and will further strengthen the strategic importance of its partnership with Great Plains. Siebel's MidMarket Edition is one of a few integrated suites available to the mid-market as licensed software. It also comprises of the broadest range of applications, as none of the competing suites offer call center support, multi-channel campaign management, and partner relationship management in one suite.

Siebel's brand awareness and large customer base within large corporations will bring intense competition to vendors such as Pivotal, Goldmine, and SalesLogix. Moreover, Siebel has already developed distribution channels that are unmatched by other CRM vendors. These facts suggest that Siebel will vigorously pursue its mid-market leadership.

Nonetheless, one should never expect a flawless and quick integration effort; Great Plains' and J.D. Edwards' painstaking efforts to integrate Siebel products and/or to train their service & support staff are perfect examples. One issue will also be the user interface mix of a future product suite - the 'same look-and-feel', as well as the support for localized, country-specific Solomon product versions. Additionally, Solomon does not exhibit much of a vertical focus. Its distributors offer vertical solutions on an opportunity-by-opportunity basis only, which may be insufficient in the light of the latest market trends. Integration of the Siebel product will certainly emphasize the need to resolve the above-mentioned challenges.


SOURCE:
http://www.technologyevaluation.com/research/articles/winner-takes-all-siebel-ousts-saleslogix-from-solomon-s-deal-16094/

Cognos Unveils CRM Solution

 Cognos (NASDAQ: COGN; TSE:CSN), one of the world's largest business intelligence (BI) companies, today unveiled a comprehensive BI solution (including interactive reporting, data analysis, and scorecarding) for the customer relationship management (CRM) marketplace. The announcement was part of an aggressive CRM market initiative showcased at Cognos's Enterprise 2000 conference to an audience of corporate executives and industry experts. Cognos showcased its Cognos business intelligence for CRM solution as providing the extensive interactive reporting, analysis and scorecarding functionality critical to organizations looking to better attract and retain customers.

CRM is generally understood to refer to an integrated information system that is used to plan, schedule and control the presales and post sales activities in an organization. Although the dividing lines are not well-defined, CRM has generally not been understood to include the marketing function. The theory behind CRM initiatives is to improve a company's understanding of their customer's needs and preferences. Theoretically, this will create greater customer retention and easier customer acquisition.

Joanne K. Masingill, Cognos's Senior Vice president of marketing stated that "an effective CRM system is no longer a 'nice-to-have' but a must-have requirement for competing and winning in the Internet economy. Cognos allows organizations to consolidate data, across inventory to sales and customer information, to deliver the operational efficiencies and high-touch customer relationships demanded by today's customers."

Market Impact

Cognos is a very strong competitor in the business intelligence space. It is logical for them to enter the extremely hot CRM market. Their extensive experience with tools that use multi-dimensional databases (i.e., Cognos PowerPlay) should enable them to hit the ground running, giving companies the ability to drill down and across product lines, and customers the power to discover developing trends. They also have the advantage of being able to sell into their huge installed base. Companies already using Cognos's CRM solution include Send.com and United Guaranty.

In order to further accelerate their entry into the CRM market, Cognos has joined the Siebel (NASDAQ: SEBL) alliance program as a premier partner, along with 92 other vendors (at current count), many of which are also in the business intelligence space, who provide competencies not core to Siebel's business. Siebel is currently the largest CRM vendor on the operational side, but is partnering to provide some of the analytics. "The basis for successful loyalty relationships is providing a full-service approach. Siebel Systems enjoys a leading position in the customer-facing eBusiness market and Cognos is excited to be a partner," said Patrick O'Leary, Cognos vice president of strategic alliances. "CRM is a natural complement for our enterprise business intelligence solutions. Cognos and Siebel bridge the gap between business processes to ensure that customers, partners and suppliers are making consistent, coordinated decisions to grow the business and strengthen e-business relationships."

The key to this alliance is for Siebel to provide the operational CRM (such as sales force automation), and then work with other vendors to effectively analyze the data. Some of Siebel's competitors, such as E.piphany, have already made strides in this direction.




SOURCE:
http://www.technologyevaluation.com/research/articles/cognos-unveils-crm-solution-16201/

CRM Vendors Cash In On The Financial Services Industry

 The 1933 Glass-Steagal Act that prohibited the alliance of banks, securities firms, and insurance companies was repealed in November of 1999. Its repeal is creating opportunities for CRM vendors as well as for financial services firms. Competitive pressures over the past 11 months have forced financial services firms to broaden and reorganize their product offerings around the needs of the customer. The reorganization also brings the need for these large organizations to collect and share customer data across divisions and other organizations. This has created a demand for CRM applications that can meet the specific business requirements of firms in the financial services industry. Siebel Systems, Broadbase Software, and E.piphany have supplied applications to the financial services industry for some time, but the increased demand for CRM applications and rising competition has led to new business developments for each of these vendors.

Siebel Systems
Siebel Systems, Inc. (Nasdaq: SEBL) recently agreed to acquire Janna Systems to enhance its Siebel Financial Services e-business product. Janna has developed CRM software for the financial services industry since its inception in 1990. Janna's strengths are in contact management and web-based self-service. Siebel's eFinance product currently provides strong call center and lead management functionality and the addition of Janna's web-based self-service in particular will broaden Siebel's operational CRM offerings for financial organizations. In a recent press release Siebel indicated that Janna technology would be a fully integrated part of Siebel Financial Services 2001, which will be commercially available sometime next summer.

E.piphany
E.piphany, Inc. (Nasdaq: EPNY) recently partnered with Deloitte Consulting to deliver industry specific applications for customer analytics and campaign management. Deloitte will develop and implement E.piphany applications customized for Fortune 500 financial services organizations. This partnership will provide the financial services industry with a strong analytical CRM product. More information about E.piphany's products can be found in TEC's analysis When You Realized the Need for a Unified View of Your Customers, that is E.piphany.

Broadbase Software
Broadbase Software, Inc. (Nasdaq: BBSW) recently partnered with HomeCom Communications, Inc. (Nasdaq: HCOM) to deliver analytical CRM applications. HomeCom is a small Internet consulting and systems integrator with vertical expertise in the financial services. HomeCom will develop and implement Broadbase applications for financial services organizations. Broadbase's strengths are in customer analytics and personalization. They also recently agreed to acquire Servicesoft to develop applications for customer service (see: Broadbase Continues to Expand).

Market Impact

Siebel's offering is likely to be very successful, in part because of its strong brand. Furthermore, Siebel undoubtedly has the resources to integrate the software from both companies into one offering and to promote the product. Janna has a 10-year track record of developing applications for the financial services industry, and has been operating profitably for the past 9 quarters. Siebel purchased Janna to integrate its commercially tested web-based self-service applications with Siebel's operational CRM components such as call center management, field force automation, and contact management (also commercially tested). This is a stronger commitment than either E.piphany or Broadbase have made to date under their partnership agreements. Their agreements do not require significant dollar investment by the vendor to develop a product.

Although partnerships with systems integrators may indicate less commitment than an acquisition and a branded product offering (i.e., Siebel Financial Services 2001), E.piphany is fast becoming a distinguished leader in the analytical CRM market, and Deloitte Consulting operates a large, successful systems integration practice. Thus E.piphany should continue to remain strong in the financial services industry.

Broadbase, a close competitor to E.piphany, has not enjoyed the sales growth and media fanfare that E.piphany has, and its agreement with HomeCom is not going to generate much attention. HomeCom is a small organization that generated less than $7M in sales in 1999. Furthermore, HomeCom is unprofitable and has watched its stock steadily lose over 85% of its value from mid-October 1999 to mid-October 2000. Thus it is highly questionable as to what kinds of resources HomeCom will have available over the next 12 months to develop and implement Broadbase products.

Siebel, E.piphany and Broadbase are not in direct competition with each other. Many applications in their product lines have significant overlap, but Siebel's strengths are primarily in operational CRM while E.piphany and Broadbase remain strong in analytical CRM. Therefore it is likely that Siebel and E.piphany will each have room to be very successful in the financial services industry. Broadbase needs to consider other business development options if they plan to compete with E.piphany.


SOURCE:
http://www.technologyevaluation.com/research/articles/crm-vendors-cash-in-on-the-financial-services-industry-16196/

Siebel: Great Plans for Great Plains

This is the first of three articles about Great Plains resulting from TEC analysts attending the Great Plains partners' meeting, Stampede 2000, in September. The meeting provided the opportunity for in-depth research on how Siebel and Great Plains operate. The TEC analysts were able to interview both Great Plains managers and partners.

Event Summary

Siebel Systems, Incorporated, recently announced plans to allow Great Plains VARs to sell Siebel's eBusiness Applications. Great Plains currently sells a co-branded version of the Siebel MidMarket Edition 2000 named Great Plains Siebel Front Office exclusively through VARs. The partnership will allow Great Plains VARs to offer front office enterprise applications to upper-midmarket organizations (annual revenue $250M-$500M) that require functionality beyond what Great Plains Siebel Front Office provides.

Paramount to the success of this partnership is acceptance from the approximately 500 Great Plains VARs that currently sell Great Plains Siebel Front Office. With no direct sales force Great Plains relies heavily on independent resellers to learn the products, generate leads, and close deals.

Market Impact

During the recent Stampede event, (Great Plains' annual channel partner conference) a Great Plains representative stated 7 out of 10 VARs felt positively about Great Plains addition of the Great Plains Siebel Front Office to the product line. This is a good indication that Siebel eBusiness Applications will be well received by channel partners.

This partnership adds a unique alternative in the CRM market. The bulk of vendors offering a wide range of CRM applications generally fall into two categories: ERP vendors that offer CRM modules and pure play CRM vendors. ERP vendors such as Oracle and SAP have strengths in integrating CRM modules with the back end, but lack the functionality of full enterprise CRM suites such as those offered by Siebel, Onyx, or Broadbase. The Siebel - Great Plains partnership provides an environment within Great Plains and the VARs to develop tight integration with back end systems while providing the functionality of an enterprise wide CRM suite. In 9 to 12 months time, when integration efforts are commercially available, ERP and CRM vendors competing in the mid- and upper-midmarket may face stiff competition from solutions available from Great Plains VARs.


SOURCE:
http://www.technologyevaluation.com/research/articles/siebel-great-plans-for-great-plains-16143/

CRM and ASP Moves – Wise, Bold, Injudicious, Enforced, or Something Else?

 On April 10, Siebel Systems, Inc., the world's leading supplier of CRM software, and Lawson Software, the supplier of Internet-enabled enterprise applications, announced a global distribution agreement in which Lawson will integrate and sell its new line of enterprise applications with Siebel's comprehensive suite of eBusiness applications for sales, marketing, and customer service.

Lawson's worldwide sales force will sell this complete family of eBusiness solutions and eServices along with industry-specific technical training, consulting and support to both mid-sized firms and large enterprises. The combined product suite, marketed as a component of 'lawson.insight' product suite, will be available in the second quarter of 2000. Both Siebel and Lawson are committed to ensure the success of every customer implementation.

Siebel eBusiness Applications integrated with lawson.insight's Self-Evident Applications and transaction engines will become a primary Lawson product line comprising sales, marketing, and customer service, as well as enterprise functions. This combined solution will let Lawson customers move from a process-centric to customer-centric focus and gain insight into every aspect of their business across all channels - a compelling advantage in the highly competitive "new economy."

USinternetworking Inc., a leading application service provider (ASP) that currently provides an integrated Siebel and Lawson application solution via the Internet, believes users will welcome the combined solution. "USinternetworking manages both lawson.insight and Siebel eBusiness Applications, and the demand we see for both companies' software applications indicates that this integrated solution will have strong appeal to a significant group of clients worldwide," said Christopher R. McCleary, chairman and CEO, USinternetworking.

By partnering with Lawson, Siebel Systems gains full integration with a leading provider of enterprise applications comprising financial services, human resources, procurement, distribution, and analytics. The companies' combined resources will let Lawson quickly deliver a comprehensive solution that satisfies the needs of more than 3,000 Lawson customers worldwide, in fast growing industry sectors such as healthcare, retail, and professional services. Ongoing development efforts will be conducted by the partners to support customers of the lawson.insight joint solution.

Earlier in March, at its user group conference in San Diego, Lawson Software unveiled plans to re-brand its products and make them available from third-party Application Service Providers (ASPs). Lawson will re-brand its traditional suites as e-business engines, Self-Evident Applications (SEAs), and extensions under the name 'lawson.insight'.

Lawson will roll out a web-based interface for its enterprise software called eConsul, and its ERP packages will be hosted by ASPs including USinternetworking Inc., Annapolis, Md. The move will give Lawson's channel partners new opportunities in a variety of vertical industries that will need customized solutions. The company has already started training channel partners to take advantage of new software models.

Market Impact

The first part of the news is not a shocking surprise. We already expressed our concerns regarding Lawson's original decision to deliver an internally developed CRM solution (See TEC's note from February 18 "Lawson Software: Self-Evidently Thriving on Innovations"), as the task has proven to be a tall order even for its bigger and stronger competitors.

Somewhat intriguing is, however, the fact that only now has Lawson's management conceded the initial error in judgment and drifted from its original CRM strategy. It announced last fall that it was developing a sales force automation tool as the first component of a planned CRM product line. The sales application was scheduled for beta-testing this spring and shipment in the summer. The solution was even demonstrated at IEC Exposition in New York at the beginning of March. Unfortunately, the company belatedly realized it would take too long to build the CRM suite internally. The sales automation package apparently addressed only one-fifth of the functionality needed to match an existing suite such as Siebel's. Therefore this sudden change of plan in style of "if you cannot beat them, join them".

To err is human. The time and resources have indeed been wasted, but the damage is a far cry from bring irreparable. Lawson is not the only business applications vendor that has signed a reseller deal with Siebel. Siebel holds a reputation of a 'partnership-friendly' vendor given the fact that it partners with a myriad of other vendors. J.D. Edwards & Co. has resold Siebel's sales automation software since last spring and in February said it would also start marketing the rest of Siebel's CRM packages. Great Plains has even claimed the completion of the first phase of integrating Siebel within its eEnterprise product.

The partnership between Siebel and Lawson could be very interesting, as both have exciting products and technologies. Siebel will gain access to Lawson's large customer base within specific industries that have not yet been made aware of Siebel's capabilities and products. Lawson, on the other hand, is betting on the notion that one cannot go wrong in selling Siebel's products. The existence of common ASP partners like Usinternetworking is also beneficial.

Yet, one should never expect a flawless and quick integration effort. One issue will be the user interface mix of a future product suite - the 'same look-and-feel', that Lawson has been able to proudly exhibit in the past will be impaired to a degree. Siebel's interface, while indisputably intuitive and compelling, is by no means so 'self-evident' like Lawson's that extensive training is not needed. Another thing to bear in mind is the lack of Siebel's vertical focus within some of the industries that are Lawson's stronghold, e.g., healthcare and professional services.

As for Lawson's decision to somewhat downplay its traditional client/server business model, we believe there are a number of reasons to support it.

The first is the growing market awareness of the cost ramifications of implementing and maintaining the traditional client/server architecture of the past.

The second reason is the Internet enablement and compelling user interface of Lawson's applications. Lawson has never been a staunch proponent of fat-client technology. On the contrary, it has long been promoting its Self-Evident Applications (SEA) initiative, with the idea to tremendously simplify the learning curve required by users. The need for this becomes more obvious with the increase of number of internal and external users that use the product on a self-service basis.

The third reason is Lawson's initial success in its ASP quest. It claims to have seven hosting partners, with a several dozens customers worldwide.

While we believe that Lawson is making a brave move, we also think it is one of the few ERP companies that can afford to make such a differentiating move. Lawson's main customer base is within the healthcare, financial, and professional services space, and sells mainly to smaller firms that are generally more attracted to the notion of turning over their applications to someone else to run, while they focus solely on their core competencies. Moreover, Lawson's software consists mainly of financial, procurement, and human resource transaction systems, the ERP components that customers are generally more eager to outsource.

Lawson, however, may feel a pinch in the immediate future should it decide to deliver its product only in the ASP mode. While CIOs make outsourcing software a serious consideration for any future IT plans, few are willing to jump on the bandwagon just yet. Also, customers like to be given a choice, and some may not appreciate having only one option, particularly while the market is in its nascent stage. Therefore we have got Lawson's assurances that it will continue to deliver its products in the traditional mode too for the foreseeable future.

As a relevant example, while Infinium Software, a vendor with similar product offerings and customer base to Lawson, has been forking out an enormous amount of resources in its own ASP operation, it is not giving up on its conventional service execution model as yet.

We believe that the idea of buying software services "across the wire" instead of in-house implementations will not become the most common model for at least 36 months. Notwithstanding, Lawson's early entry strategy may play well into this adoption phase on the condition it can weather the interim period.


SOURCE:
http://www.technologyevaluation.com/research/articles/lawson-software-s-crm-and-asp-moves-wise-bold-injudicious-enforced-or-something-else-15769/

Besieged By The CRM Throne Aspirants, King Siebel Delivers "The Magic No.7" Part 2: Market Impact

With the release of the following statement Siebel Systems, Inc. launched Siebel 7.

On November 26, Siebel Systems, Inc., the leading provider of customer-centric eBusiness applications software, shipped Siebel 7, the seventh major release of Siebel eBusiness Applications. Siebel 7 (formerly referred to as Siebel 2001) reportedly provides the most comprehensive suite of packaged applications for customer relationship management (CRM) and employee relationship management (ERM), with the lowest total cost of ownership (TCO) so far. The enhancements worth pointing out are:

    * A new Web-based architecture

    * A formalized product upgrade and enterprise application integration (EAI) strategy

    * Enhanced features across all application, including new industry-specific versions

    * The formal launch of Siebel Employee Relationship Management (ERM)

This, Part Two of a two-part News Analysis discusses the Market Impact and makes User Recommendations. Part One details recent Siebel 7 product release. .

Market Impact

At first glance this announcement reflects too much of CRM related functionality (as seen by the length of the announcement), insufficient extended enterprise functionality (ERM portals and business intelligence have long been offered by many), an adequate architecture, and all these somewhat too late. The era of Siebel's uncontested supremacy in the CRM market for the past several years seems to be nearing the end, as one is to wonder whether the above-mentioned impressive CRM functional enhancements will suffice for fending off the competition.

In the current economic climate, Siebel's CRM-centric functionality bells-and-whistles may look ever less compelling, as enterprises with heavy ERP investments from ERP leaders-turned CRM wannabes will likely settle for currently less powerful CRM offering of those, in exchange for the potential long-term benefits of extended enterprise applications integration and subsequently lower TCO. The fact is also that the CRM functionality offered by ERP leaders will not necessarily be inferior in every case either. As the CRM market is maturing, most major players are functionally converging, which forces users to consider many other order winning criteria in their selection process.

Although Siebel's functionality in marketing campaigns, SFA, interactive (guided) sales, customer service, and PRM remains the deepest in the pack, SAP, Oracle, PeopleSoft, J.D. Edwards, and Baan have slowly but surely been closing the gap. As a matter of fact, many vendors often provide more CRM functionality than many customers require. Conversely, customers' perception of the scope of CRM does not often coincide with the pure CRM vendors' one.

As an example, many prospects view the order fulfillment and content management as a part and parcel of CRM, which is often not the case with many traditional CRM vendors. As a result, if the importance of order management and content management in a user's business strategy is great, one should not be terribly surprised if SAP or any other traditional ERP vendor outscores Siebel in the enterprise applications selection. This begs the question: when will Siebel move beyond fancy order capturing, contact management, and/or call center, and take on the user's entire order management process? In addition to order management capabilities, Siebel lacks a solid strategy to support a Private Trading Exchange (PTX), both of which are increasing in importance especially from a Business-to-Business (B2B) e-commerce customer management perspective.

Siebel has indeed shown a little support for transactional and order fulfillment capabilities so far, whereas many ERP vendors can offer the support for each stage of the customer life cycle - engage, transact, fulfill, and service afterwards. In any case, each of these is critical customer-facing process, and Siebel seems to be excelling only at the first and the last. As the Siebel 7 opportunity to deliver these was missed, time will only tell whether the company will deliver these sooner than its opponents will catch up within their sub-optimal areas.

The New Architecture

Possibly more prominent enhancement in Siebel 7 is the new architecture, with the Siebel's definition of a zero-footprint client. Given the depth of functionality in Siebel's long maintained traditional fat client/server environment, this was an immense effort and a strong step forward. Siebel deserves accolades for providing all of its rich functionality in a highly interactive environment while also minimizing the impact to an organization's network.

To achieve that, it has transitioned from a fat Windows client to HTML and Java script, while the underlying backbone and the data model on the server has not basically changed. If one is to be nitpicking, the client footprint is not exactly zero - it requires some memory for Java script and several Java applets for administrative processes to support Computer Telephony Integration (CTI), its menu structure, and some of the graphical elements to be downloaded at the start of the session.

As Java applets require a Java Virtual Machine (JVM) loaded and maintained on the client, Siebel, likewise Oracle and SAP, had to turn to that in order to maintain its proprietary graphical user interface (GUI) tailored for power users in, e.g., sales departments or call centers. PeopleSoft, on the other hand, has allegedly opted for the simplicity of a native Web browser experience (although many claim that it was the easiest way out of the fat two-tier client/server architecture). One client option is not universally better than the other, as it is time and again subject to the needs and the preferences of each user class. PeopleSoft should therefore start rethinking its value proposition scope beyond the already hackneyed mantra "no code on the client" - touting that to a less technologically aggressive enterprise would have a similar effect like a car dealer touting the sport alloy wheels to senior citizens.

Integration

Nevertheless, while Siebel applications will also support interoperability with Component Object Model (COM), Common Object Request Broker Architecture (CORBA), and Enterprise Java Beans (EJB) environments, the provided applications programming interface (API) connectors to third-party product will integrate at merely a superficial data level.

In maintaining its functionally overwhelming and monolithic product, Siebel is showing another aspect of resemblance to SAP's predicament of the late 90s. Although Siebel's moves towards delivering industry templates and the solutions for mid-market are commendable, not much will change until the company breaks its suite into more granular components and delivers implementation and customization tools. Customers will increasingly opt for competitors products that may have less functionality, but are much more implementation and customization friendly. The recent fallout with J.D. Edwards (see J.D. Edwards Fires Siebel, Hires YOU), as well as Microsoft's polygamy with Pivotal are some examples. Moreover, some mid-market ERP vendors already offer sound CRM offering (e.g., Epicor Software, Infinium), many current Siebel ERP partners are increasingly delivering their CRM capabilities (e.g., Navision), while many smaller ERP vendors without CRM offering will rather opt for an alliance with the likes of Interact Commerce.

Consequently, sooner or later, Siebel will realize the need to open and/or componentize its product. At the moment, we believe the company is torn between pro et contra of the approach - while it could incrementally (module by module) penetrate and possibly grow to a major presence in accounts where it currently has none. Conversely, its leverage in current accounts may wear away module by module, as the customer's ERP provider comes up with an equivalent CRM functionality.

Upgrades

Like many other applications vendors, Siebel faces the challenge of offering existing customers painless upgrades too. While the fact that more than 90% of Siebel's customers are on the current version (Siebel 6/Siebel 2000), one should note that the previous product releases all shared almost identical client/server architecture. Therefore, upgrading to the new Web-based architecture of Siebel 7 will require a more painstaking approach than it was the case with previous feature/function release enhancements only. The new Web client will not support most of the client-side customization (through, e.g., Visual Basic or COM components) that customers might have had to turn to in the previous releases.

Siebel has traditionally provided its Siebel Application Upgrader to facilitate customers through the migration process, but Siebel 7 Upgrader will not seemingly provide any conversion assistance for client side. As customers will have to reconstruct existing client-side customizations on a server, one should reckon with spending significant time, money and human resources. Customers will also have to learn new methods of GUI customization, given that Siebel has introduced new client-side technology. Siebel's lack of system management and testing capabilities (like e.g., SAP Computing Center Management System (CCMS) or PeopleSoft OEM-ing Tuxedo) is becoming ever more noticeable. Therefore, the cost/benefit ratio of a transition to the Siebel 7 may be less compelling to customers, which will likely postpone the upgrade until the benefits are much clearer than a mere thin-client offering.

Competitive Pressures

While Siebel remains strong company, with more than $1.5 billion in cash and yet to report a losing quarter, with the largest roster of trained and certified system integration (SI) partners, and with strong industry focused CRM offerings, for the first time, it may have to consider more competitive pricing and a less conceited sales approach. As the competition will fly from all directions and the license revenue will likely decline, the company will have to make it up by emphasizing own professional services revenue. Its external partners will therefore be unimpressed by a constricting size of the SI pie slice, and will be tempted to switch to competitors' products. Time will only tell how Siebel will overcome first major hardships in its until now spotless history.


SOURCE:
http://www.technologyevaluation.com/research/articles/besieged-by-the-crm-throne-aspirants-king-siebel-delivers-the-magic-no.7-part-2-market-impact-16553/

Siebel Enters Smaller Markets in a Big Way

 Siebel Systems, Inc. develops eBusiness Customer Relationship Management (eCRM) software primarily for companies with over $250 million in sales. Siebel recently released eBusiness 2000 MidMarket Edition, a suite of CRM applications geared for small to mid-size companies. This suite is Siebel's first attempt to compete in the mid-market.

Siebel's MidMarket Edition offers these businesses a set of applications to manage relationships with customers, resellers, and partners. The suite is made up of three integrated groups of applications, Customer Applications, Employee Applications, and Partner Applications:

    * Customer Applications intend to improve customer satisfaction and employee productivity. These applications provide web-based CRM functionality such as dynamic catalog management and a personalization engine for one-to-one web interaction. These applications also provide e-mail and web-based customer service. Customers can submit service requests via e-mail and check the status on their personalized web page. Service representatives can categorize and respond to service requests by e-mail within the application.

    * Employee Applications provide campaign management tools, a product configurator, service request tracking tools, and a quote generator. These tools can be used by marketers and managers without the assistance of IT professionals. There is also a Territory Management application that can support a direct sales force by routing all sales leads and other relevant information to the appropriate salesperson by geographical or other criteria.

    * Partner Applications provide channel partners with sales and service information to bring customer data under one view across multiple organizations. This is accomplished in part through the use of personalized web pages for partners to route and track sales leads to the proper organization.

Siebel's eBusiness MidMarket Edition and enterprise-level applications are available directly from Siebel as well as from over 20 resellers. Resellers include Great Plains, JD Edwards, and Lawson in addition to ASP resellers Corio, USInternetworking, and Applicast.

Market Impact

Siebel's MidMarket Edition is one of a few integrated suites available to the mid-market as licensed software. Other mid-market suites include Onyx's FrontOffice 2000, Quintus' eContact Suite, and Allaire's Insight 5. MidMarket Edition has the broadest range of applications, as none of the competing suites offer call center support, multi-channel campaign management, and partner relationship management in one suite. Furthermore, Siebel promises an easy upgrade to its enterprise-level applications. That is an advantage over Onyx, Quintus, and Allaire. Competition in the mid-market also comes from other top-tier CRM vendors utilizing an ASP model. One of the advantages of the ASP model is that it brings business applications to the mid-market that were once only affordable to large corporations. Siebel may bring some confusion to mid-market customers now that somewhat redundant offerings exist for these firms.

Siebel's brand awareness and considerable experience serving large corporations will bring intense competition to vendors such as Onyx, Quintus, and Allaire. Moreover, Siebel has well-developed distribution channels that are unmatched by other CRM vendors. These facts suggest that Siebel will be a market leader in the mid-market within the next six to nine months.

SOURCE:
http://www.technologyevaluation.com/research/articles/siebel-enters-smaller-markets-in-a-big-way-16052/

Siebel Rallies Its Integration Alliance Troops Part 2: Market Impact

On April 8, Siebel Systems, Inc. (NASDAQ: SEBL), the leading provider of customer-centric eBusiness applications software announced its intention to release a set of application integration tools in the second half of 2002. The new products intend make it easier for organizations to exchange data between Siebel's CRM system its other vendors' business applications. A standards-based and vendor-independent application integration solution called Universal Application Network (UNA) is touted to dramatically reduce the need for custom integration, thereby minimizing complexity, speeding deployment and delivering a low total cost of ownership (TCO). Leading system integrators such as Cap Gemini Ernst & Young, Accenture, IBM Global Services and KPMG Consulting, and application integration server vendors including IBM, SeeBeyond, TIBCO Software, Vitria, and webMethods, have all committed technology and expertise to deliver the Universal Application Network. The most recent to join in was BMC Software on April 22.

Siebel Systems believes it is positioned well to deliver this solution through its open architecture, industry specific domain expertise and extensive partner ecosystem

This is Part 2 of a 2-part analysis of recent Siebel Systems' product announcements.

For details on the announcement see Part 1.

Increasing Competition

The era of Siebel's uncontested supremacy in the CRM market seems to be nearing the end, also owing to both Tier 1 ERP vendors intrusion of the CRM space and to some mid-market CRM vendors coming of age. Although Siebel's moves towards delivering industry templates and the solutions for mid-market are commendable, not much will change until the company breaks its suite into more digestible components and delivers simplifying implementation and customization tools.

Customers will increasingly opt for competitors' products that may have less functionality, but are much more implementation and customization friendly, and possibly offer tightly integrated solution. The recent fallout with J.D. Edwards (see J.D. Edwards Fires Siebel, Hires YOU), as well as Microsoft's delivery of its own CRM product (see Microsoft Throws .NET At SMEs, With CRM As Bait) and Microsoft's polygamy with CRM mid-market stalwarts Onyx and Pivotal are some examples. Moreover, some mid-market ERP vendors already offer a sound CRM offering (e.g., Best Software, Epicor Software, Infinium), many current Siebel ERP partners are increasingly delivering their CRM capabilities (e.g., Navision, Microsoft Great Plains), while many smaller ERP vendors without a CRM offering will rather opt for an alliance with the likes of Interact Commerce or FrontRange, or will pursue a delivery of their own CRM components (see Mid-Market ERP Vendors Doing CRM & SCM In A DIY Fashion).

In the current economic climate, Siebel's CRM-centric functionality bells-and-whistles and an adequate Web-enabled product architecture may look ever less compelling even to the higher-end of the market, as enterprises with heavy ERP investments from ERP leaders-turned CRM wannabes might settle for likely less powerful CRM offering of those, in exchange for the potential long-term benefits of extended enterprise applications integration and subsequently lower TCO (see Integration is the Name of the Game in Software Systems).

The fact is also that the CRM functionality offered by ERP leaders will not necessarily be inferior in every case either. As an example, if the importance of order management and content management in a user's business strategy is great, one should not be terribly surprised if SAP or any other traditional ERP vendor outscores Siebel in the enterprise applications selection. This has long begged the question when Siebel would move beyond fancy order capturing, contact management, and/or call center, and take on the user's entire order management process. Siebel has indeed traditionally shown a little support for transactional and order fulfillment capabilities, whereas many ERP vendors can offer the support for each stage of the customer life cycle - engage, transact, fulfill, and service afterwards. In any case, each of these is a critical customer-facing process, and Siebel seems to have excelled only at the first and the last. As the Siebel 7 opportunity to deliver these was missed, time will only tell whether the Siebel 7.5 will deliver these sooner than its opponents will catch up within their sub-optimal areas.

Nevertheless, Siebel's idea of its Universal Application Network seems innovative and should help the needs of the higher-end of the market, whose paramount concern have been the enormous costs of integration and the general lack of responsiveness by enterprise application vendors to address this issue. Siebel's embracement of standards-based Web services as a technology enabler may appeal to customers that are keen on preempting dependencies on proprietary Application Programming Interfaces (APIs). Although Siebel is not the only one to go in this direction given J.D. Edwards' OneWorld eXternal Process Integration (XPI) "middleware-in-the-box" approach and SAP's recent subscription to Web services and business process integration (see SAP Opens The 'Miss Congeniality' Contest), Siebel might be going a step ahead by gaining the endorsement of several prominent enterprise application integration (EAI) suppliers and systems integrators (SI) for an initiative to standardize EAI.

Although integration servers may reduce that complexity to a degree because all the applications plug into a central hub, the EAI servers themselves tend to be proprietary and non-standard. The customers are increasingly desiring to do away with point-to-point integration approaches at that data level (with extensive lists of custom APIs and connectors/adapters) and to replace it with more inter-enterprise ranging integrations, based on business processes that extend beyond the traditional definitional boundaries of a single application suite.

Therefore, Siebel's strive for standards-based business processes to plug into industry-standard servers, may raise the least common denominator of interoperability. Siebel had no better option to pursue though given the lack of its own back-office offering and its adoption by a diverse population of ERP users. This is also the chance for these EAI vendors to devise an answer to SAP's business process level of integration and modeling (via SAP new tools like Solution Maps, C-Business Maps, and Solution Composer), in addition to their offerings' immaculate transactional performance. Furthermore, the move will help Siebel open and/or componentize its product, as standards like eXtensible Markup Language (XML) and eXtensible Stylesheet Language (XSL) make it possible to share data and have a common look-and-feel across an application, without necessarily digging in the source code. Provided that, Siebel could incrementally (module by module) penetrate and possibly grow to a major presence in accounts where it currently has none. Conversely, its leverage in current accounts may wear away module by module, as the customer's ERP provider comes up with an equivalent CRM functionality.

Challenges

Siebel's UAI approach will not happen easily and quickly, notwithstanding. One issue will be whether Siebel will convince customers to rely on it for extended enterprise business processes integration, given Tier 1 ERP vendors' strides in that regard. This challenge may not be that insurmountable given Siebel's sweet spot of extending customer-centric business processes within Siebel's industries of focus (e.g., energy, financial services).

Another obvious challenge is a mere volume of the imminent work that is ahead of Siebel and its partners to offer almost 'out-of-the-box' integrated functionality in shape of a pre-built library of business processes. Now, at least by the above mind boggling announcement and description of UAI, it may be clearer how complex CRM integration is so that a client can obtain an enterprise wide view of customers and share it accurately across all channels and divisions. One should imagine how humongous the job of delivering plug-and-play packaged middleware components for a number of disparate applications will be.

Yet another challenge will be in managing relationships with each integration provider. To that end, Siebel should promptly articulate how, e.g., problem reporting and escalation will work and who will be in charge/owner of which part of the solution. Given a number of conceited competing vendors in case, one should expect a contest for the most favored integration partner in this arrangement. In order to diffuse consternation and vendors' attempts to embed their proprietary technology as to create dependency on their product (which would defeat the purpose of touted universality), Siebel might want to select a preferred provider for certain industry or a certain product line. A good example would be Siebel's announcement that webMethods is the preferred real-time integration provider for its Partner Relationship Management (PRM) product line and that TIBCO will have a similar treatment for financial services and energy segment.

Summary

As a summary, Siebel should be pleased with the support from the EAI and SI industry leaders, and if it can manage and execute these properly, the company might leverage each partnership to meet particular technology and industry requirements. Should its superior CRM functionality come together with an embedded integration to incumbent enterprise applications, it might be a compelling value proposition to the markets that have been inaccessible to Siebel so far.


SOURCE:
http://www.technologyevaluation.com/research/articles/siebel-rallies-its-integration-alliance-troops-part-2-market-impact-16654/

CRM Vendors Cash In On The Financial Services Industry

 The 1933 Glass-Steagal Act that prohibited the alliance of banks, securities firms, and insurance companies was repealed in November of 1999. Its repeal is creating opportunities for CRM vendors as well as for financial services firms. Competitive pressures over the past 11 months have forced financial services firms to broaden and reorganize their product offerings around the needs of the customer. The reorganization also brings the need for these large organizations to collect and share customer data across divisions and other organizations. This has created a demand for CRM applications that can meet the specific business requirements of firms in the financial services industry. Siebel Systems, Broadbase Software, and E.piphany have supplied applications to the financial services industry for some time, but the increased demand for CRM applications and rising competition has led to new business developments for each of these vendors.

Siebel Systems
Siebel Systems, Inc. (Nasdaq: SEBL) recently agreed to acquire Janna Systems to enhance its Siebel Financial Services e-business product. Janna has developed CRM software for the financial services industry since its inception in 1990. Janna's strengths are in contact management and web-based self-service. Siebel's eFinance product currently provides strong call center and lead management functionality and the addition of Janna's web-based self-service in particular will broaden Siebel's operational CRM offerings for financial organizations. In a recent press release Siebel indicated that Janna technology would be a fully integrated part of Siebel Financial Services 2001, which will be commercially available sometime next summer.

E.piphany
E.piphany, Inc. (Nasdaq: EPNY) recently partnered with Deloitte Consulting to deliver industry specific applications for customer analytics and campaign management. Deloitte will develop and implement E.piphany applications customized for Fortune 500 financial services organizations. This partnership will provide the financial services industry with a strong analytical CRM product. More information about E.piphany's products can be found in TEC's analysis When You Realized the Need for a Unified View of Your Customers, that is E.piphany.

Broadbase Software
Broadbase Software, Inc. (Nasdaq: BBSW) recently partnered with HomeCom Communications, Inc. (Nasdaq: HCOM) to deliver analytical CRM applications. HomeCom is a small Internet consulting and systems integrator with vertical expertise in the financial services. HomeCom will develop and implement Broadbase applications for financial services organizations. Broadbase's strengths are in customer analytics and personalization. They also recently agreed to acquire Servicesoft to develop applications for customer service (see: Broadbase Continues to Expand).

Market Impact

Siebel's offering is likely to be very successful, in part because of its strong brand. Furthermore, Siebel undoubtedly has the resources to integrate the software from both companies into one offering and to promote the product. Janna has a 10-year track record of developing applications for the financial services industry, and has been operating profitably for the past 9 quarters. Siebel purchased Janna to integrate its commercially tested web-based self-service applications with Siebel's operational CRM components such as call center management, field force automation, and contact management (also commercially tested). This is a stronger commitment than either E.piphany or Broadbase have made to date under their partnership agreements. Their agreements do not require significant dollar investment by the vendor to develop a product.

Although partnerships with systems integrators may indicate less commitment than an acquisition and a branded product offering (i.e., Siebel Financial Services 2001), E.piphany is fast becoming a distinguished leader in the analytical CRM market, and Deloitte Consulting operates a large, successful systems integration practice. Thus E.piphany should continue to remain strong in the financial services industry.

Broadbase, a close competitor to E.piphany, has not enjoyed the sales growth and media fanfare that E.piphany has, and its agreement with HomeCom is not going to generate much attention. HomeCom is a small organization that generated less than $7M in sales in 1999. Furthermore, HomeCom is unprofitable and has watched its stock steadily lose over 85% of its value from mid-October 1999 to mid-October 2000. Thus it is highly questionable as to what kinds of resources HomeCom will have available over the next 12 months to develop and implement Broadbase products.

Siebel, E.piphany and Broadbase are not in direct competition with each other. Many applications in their product lines have significant overlap, but Siebel's strengths are primarily in operational CRM while E.piphany and Broadbase remain strong in analytical CRM. Therefore it is likely that Siebel and E.piphany will each have room to be very successful in the financial services industry. Broadbase needs to consider other business development options if they plan to compete with E.piphany.



SOURCE:
http://www.technologyevaluation.com/research/articles/crm-vendors-cash-in-on-the-financial-services-industry-16196/

Siebel: Great Plans for Great Plains

This is the first of three articles about Great Plains resulting from TEC analysts attending the Great Plains partners' meeting, Stampede 2000, in September. The meeting provided the opportunity for in-depth research on how Siebel and Great Plains operate. The TEC analysts were able to interview both Great Plains managers and partners.

Event Summary

Siebel Systems, Incorporated, recently announced plans to allow Great Plains VARs to sell Siebel's eBusiness Applications. Great Plains currently sells a co-branded version of the Siebel MidMarket Edition 2000 named Great Plains Siebel Front Office exclusively through VARs. The partnership will allow Great Plains VARs to offer front office enterprise applications to upper-midmarket organizations (annual revenue $250M-$500M) that require functionality beyond what Great Plains Siebel Front Office provides.

Paramount to the success of this partnership is acceptance from the approximately 500 Great Plains VARs that currently sell Great Plains Siebel Front Office. With no direct sales force Great Plains relies heavily on independent resellers to learn the products, generate leads, and close deals.

Market Impact

During the recent Stampede event, (Great Plains' annual channel partner conference) a Great Plains representative stated 7 out of 10 VARs felt positively about Great Plains addition of the Great Plains Siebel Front Office to the product line. This is a good indication that Siebel eBusiness Applications will be well received by channel partners.

This partnership adds a unique alternative in the CRM market. The bulk of vendors offering a wide range of CRM applications generally fall into two categories: ERP vendors that offer CRM modules and pure play CRM vendors. ERP vendors such as Oracle and SAP have strengths in integrating CRM modules with the back end, but lack the functionality of full enterprise CRM suites such as those offered by Siebel, Onyx, or Broadbase. The Siebel - Great Plains partnership provides an environment within Great Plains and the VARs to develop tight integration with back end systems while providing the functionality of an enterprise wide CRM suite. In 9 to 12 months time, when integration efforts are commercially available, ERP and CRM vendors competing in the mid- and upper-midmarket may face stiff competition from solutions available from Great Plains VARs.


SOURCE:
http://www.technologyevaluation.com/research/articles/siebel-great-plans-for-great-plains-16143/

Siebel Rallies Its Integration Alliance Troops Part 1: Recent Announcements

On April 8, Siebel Systems, Inc. (NASDAQ: SEBL), the leading provider of customer-centric eBusiness applications software announced its intention to release a set of application integration tools in the second half of 2002. The new products intend make it easier for organizations to exchange data between Siebel's CRM system its other vendors' business applications. A standards-based and vendor-independent application integration solution called Universal Application Network (UNA) is touted to dramatically reduce the need for custom integration, thereby minimizing complexity, speeding deployment and delivering a low total cost of ownership (TCO). Leading system integrators such as Cap Gemini Ernst & Young, Accenture, IBM Global Services and KPMG Consulting, and application integration server vendors including IBM, SeeBeyond, TIBCO Software, Vitria, and webMethods, have all committed technology and expertise to deliver the Universal Application Network. The most recent to join in was BMC Software on April 22.

Siebel Systems believes it is positioned well to deliver this solution through its open architecture, industry specific domain expertise and extensive partner ecosystem. It claims that its Universal Application Network solution:

    * Delivers industry-specific extensible business processes. -- Leveraging industry best practices and the domain expertise of leading system integrators, Siebel Systems pledges to build a set of prepackaged business processes to reduce cost, complexity and risk of application integration, while accelerating time to deployment.
      
    * Provides re-usable business processes, enabling organizations to "create once, deploy everywhere." -- Independent of both the underlying applications and integration server, the prepackaged business processes should be re-used across multiple divisions or lines of business (LOB) --even where different applications or integration servers are deployed.
      
    * Embraces industry standards. -- Universal Application Network is based on emerging Web Services and XML standards, which are supported by the above prominent integration technology vendors.
      
    * Leverages proven integration server technology that is robust, highly scalable, and reliable, supporting thereby the integration requirements of the world's largest organizations and most complex IT environments.
      
    * Offers organizations maximum flexibility and choice. -- Universal Application Network is devised as application-independent, leveraging customers' existing investments and interoperating with any underlying application. As a result, customers should no longer be locked into a single vendor's proprietary product set and integration architecture, but can instead select from the industry's best application and integration technologies.

Combining Siebel Systems and its partners' domain expertise, Universal Application Network is comprised of three major components: 1) a comprehensive business process library, 2) a business process design tool, and 3) an integration server. The new products focus heavily on business process management concepts and will contain an electronic reference guide that instructs customers on standard ways of configuring Siebel to support certain business functions, such as acquiring new customers.

This is Part 1 of a 2-part analysis of Siebel Systems' recent product announcements.

Part 2 will discuss the Market Impact and make User Recommendations.

Universal Application Network Components

The Business Process Library is a collection of the above-mentioned prepackaged, industry specific business processes-such as Customer Creation or Quote to Order, which are based on XML and Web Services standards and are independent of both the underlying applications and integration server. Siebel's business process library will contain instructions for ~200 potential scenarios. These business processes include:

    * Pre-built business process flows. These orchestrate a sequence of steps across multiple applications to achieve a business objective. They are defined using an industry-leading specification based on Web Services standards.
      
    * Common objects. These objects are a composite of application data models and are compliant with industry-specific standards such as RosettaNet and OAG. Siebel Systems provides a comprehensive set of pre-defined objects, such as customer, employee, product and quote objects.
      
    * Transformation maps. These provide mappings between the application data models and common objects, and are based on XSLT standards. Siebel Systems provides pre-built transformation maps to back office applications (such as SAP, Oracle, Peoplesoft, etc.).

The Business Process Design Tool is an intuitive graphical tool for developing and configuring business process solutions-including business process flows, common objects, and transformation maps. The design tool consists of:

    * Business Process Flow Modeler, which enables the user to describe business processes at various levels of abstraction that are application independent. The Business Process Flow modeler also provides visual representation of error conditions, transactional boundaries, and compensating transactions.
      
    * Transformation Modeler, which is used to define transformations, which describe mappings between common objects and the application data model. The user can visually drag and drop fields and choose available function libraries to define custom transformations.

The Integration Server coordinates inter-application communication. Examples of commercially available Integration Servers include IBM WebSphere Business Integration, SeeBeyond Business Integration Suite, TIBCO BusinessWorks, Vitria BusinessWare, and webMethods Platform. These products are being enhanced to specifically execute the standards-based business processes and include the following elements: Transport layer, Adapter, Common object model, Transformations, and Business process controller.

With the release of Siebel 7 at the end of 2001, Siebel Systems was one of the first eBusiness applications vendors to recognize the heterogeneous, multi-vendors reality of customers' IT environments by introducing an "application network" integration architecture (see Besieged By The CRM Throne Aspirants, King Siebel Delivers "The Magic No.7"). Now, Siebel Systems has taken a next step to build on this approach through strategic partnerships and the development of new functionality for Universal Application Network planned for availability this summer. Siebel 7.5, due this summer, will add support for SOAP, WSDL and UDDI protocols. Nearly all application vendors from SAP, Oracle, PeopleSoft and IBM to Microsoft have professed support for these standards (see Liberty Alliance vs. WS-I; J2EE vs. .NET; Overwhelmed .YET?). Ideally, such support will enable Web services to be described, found, and accessed on the Internet, and Siebel is seeking to enter the Web services fray with 7.5.

Market Impact

Rather than to remain on its high horse and complacent, narcissistic rumbling about its CRM product's functional superiority and its leading market shares in all segments of the CRM market, Siebel is finally taking 'the bull by the horns' by acknowledging the integration challenges its customers face, and by addressing that issue, which has been one of the major sales deterrent of late. This has also often been a troubling aspect of CRM implementations in the past, as the only way IT departments can achieve a full view of the customer is by integrating front-end, customer facing applications (e.g., contact management) with back-office systems, such as billing applications and financial ERP modules. To illustrate the intricacy, Siebel's larger customers have a multiplicity of applications they want to connect. Nearly 10% of them reportedly have more than 1,000 applications rendering the problem of integration colossal. As a most extreme example, General Motors is reportedly attempting to integrate Siebel applications with more than 5,000 other software systems.


SOURCE:
http://www.technologyevaluation.com/research/articles/siebel-rallies-its-integration-alliance-troops-part-1-recent-announcements-16652/

Lawson Software’s CRM and ASP Moves

 On April 10, Siebel Systems, Inc., the world's leading supplier of CRM software, and Lawson Software, the supplier of Internet-enabled enterprise applications, announced a global distribution agreement in which Lawson will integrate and sell its new line of enterprise applications with Siebel's comprehensive suite of eBusiness applications for sales, marketing, and customer service.

Lawson's worldwide sales force will sell this complete family of eBusiness solutions and eServices along with industry-specific technical training, consulting and support to both mid-sized firms and large enterprises. The combined product suite, marketed as a component of 'lawson.insight' product suite, will be available in the second quarter of 2000. Both Siebel and Lawson are committed to ensure the success of every customer implementation.

Siebel eBusiness Applications integrated with lawson.insight's Self-Evident Applications and transaction engines will become a primary Lawson product line comprising sales, marketing, and customer service, as well as enterprise functions. This combined solution will let Lawson customers move from a process-centric to customer-centric focus and gain insight into every aspect of their business across all channels - a compelling advantage in the highly competitive "new economy."

USinternetworking Inc., a leading application service provider (ASP) that currently provides an integrated Siebel and Lawson application solution via the Internet, believes users will welcome the combined solution. "USinternetworking manages both lawson.insight and Siebel eBusiness Applications, and the demand we see for both companies' software applications indicates that this integrated solution will have strong appeal to a significant group of clients worldwide," said Christopher R. McCleary, chairman and CEO, USinternetworking.

By partnering with Lawson, Siebel Systems gains full integration with a leading provider of enterprise applications comprising financial services, human resources, procurement, distribution, and analytics. The companies' combined resources will let Lawson quickly deliver a comprehensive solution that satisfies the needs of more than 3,000 Lawson customers worldwide, in fast growing industry sectors such as healthcare, retail, and professional services. Ongoing development efforts will be conducted by the partners to support customers of the lawson.insight joint solution.

Earlier in March, at its user group conference in San Diego, Lawson Software unveiled plans to re-brand its products and make them available from third-party Application Service Providers (ASPs). Lawson will re-brand its traditional suites as e-business engines, Self-Evident Applications (SEAs), and extensions under the name 'lawson.insight'.

Lawson will roll out a web-based interface for its enterprise software called eConsul, and its ERP packages will be hosted by ASPs including USinternetworking Inc., Annapolis, Md. The move will give Lawson's channel partners new opportunities in a variety of vertical industries that will need customized solutions. The company has already started training channel partners to take advantage of new software models.

Market Impact

The first part of the news is not a shocking surprise. We already expressed our concerns regarding Lawson's original decision to deliver an internally developed CRM solution (See TEC's note from February 18 "Lawson Software: Self-Evidently Thriving on Innovations"), as the task has proven to be a tall order even for its bigger and stronger competitors.

Somewhat intriguing is, however, the fact that only now has Lawson's management conceded the initial error in judgment and drifted from its original CRM strategy. It announced last fall that it was developing a sales force automation tool as the first component of a planned CRM product line. The sales application was scheduled for beta-testing this spring and shipment in the summer. The solution was even demonstrated at IEC Exposition in New York at the beginning of March. Unfortunately, the company belatedly realized it would take too long to build the CRM suite internally. The sales automation package apparently addressed only one-fifth of the functionality needed to match an existing suite such as Siebel's. Therefore this sudden change of plan in style of "if you cannot beat them, join them".

To err is human. The time and resources have indeed been wasted, but the damage is a far cry from bring irreparable. Lawson is not the only business applications vendor that has signed a reseller deal with Siebel. Siebel holds a reputation of a 'partnership-friendly' vendor given the fact that it partners with a myriad of other vendors. J.D. Edwards & Co. has resold Siebel's sales automation software since last spring and in February said it would also start marketing the rest of Siebel's CRM packages. Great Plains has even claimed the completion of the first phase of integrating Siebel within its eEnterprise product.

The partnership between Siebel and Lawson could be very interesting, as both have exciting products and technologies. Siebel will gain access to Lawson's large customer base within specific industries that have not yet been made aware of Siebel's capabilities and products. Lawson, on the other hand, is betting on the notion that one cannot go wrong in selling Siebel's products. The existence of common ASP partners like Usinternetworking is also beneficial.

Yet, one should never expect a flawless and quick integration effort. One issue will be the user interface mix of a future product suite - the 'same look-and-feel', that Lawson has been able to proudly exhibit in the past will be impaired to a degree. Siebel's interface, while indisputably intuitive and compelling, is by no means so 'self-evident' like Lawson's that extensive training is not needed. Another thing to bear in mind is the lack of Siebel's vertical focus within some of the industries that are Lawson's stronghold, e.g., healthcare and professional services.

As for Lawson's decision to somewhat downplay its traditional client/server business model, we believe there are a number of reasons to support it.

The first is the growing market awareness of the cost ramifications of implementing and maintaining the traditional client/server architecture of the past.

The second reason is the Internet enablement and compelling user interface of Lawson's applications. Lawson has never been a staunch proponent of fat-client technology. On the contrary, it has long been promoting its Self-Evident Applications (SEA) initiative, with the idea to tremendously simplify the learning curve required by users. The need for this becomes more obvious with the increase of number of internal and external users that use the product on a self-service basis.

The third reason is Lawson's initial success in its ASP quest. It claims to have seven hosting partners, with a several dozens customers worldwide.

While we believe that Lawson is making a brave move, we also think it is one of the few ERP companies that can afford to make such a differentiating move. Lawson's main customer base is within the healthcare, financial, and professional services space, and sells mainly to smaller firms that are generally more attracted to the notion of turning over their applications to someone else to run, while they focus solely on their core competencies. Moreover, Lawson's software consists mainly of financial, procurement, and human resource transaction systems, the ERP components that customers are generally more eager to outsource.

Lawson, however, may feel a pinch in the immediate future should it decide to deliver its product only in the ASP mode. While CIOs make outsourcing software a serious consideration for any future IT plans, few are willing to jump on the bandwagon just yet. Also, customers like to be given a choice, and some may not appreciate having only one option, particularly while the market is in its nascent stage. Therefore we have got Lawson's assurances that it will continue to deliver its products in the traditional mode too for the foreseeable future.

As a relevant example, while Infinium Software, a vendor with similar product offerings and customer base to Lawson, has been forking out an enormous amount of resources in its own ASP operation, it is not giving up on its conventional service execution model as yet.

We believe that the idea of buying software services "across the wire" instead of in-house implementations will not become the most common model for at least 36 months. Notwithstanding, Lawson's early entry strategy may play well into this adoption phase on the condition it can weather the interim period.




SOURCE:
http://www.technologyevaluation.com/research/articles/lawson-software-s-crm-and-asp-moves-wise-bold-injudicious-enforced-or-something-else-15769/

Besieged By The CRM Throne Aspirants, King Siebel Delivers "The Magic No.7

With the release of the following statement Siebel Systems, Inc. launched Siebel 7.

On November 26, Siebel Systems, Inc., the leading provider of customer-centric eBusiness applications software, shipped Siebel 7, the seventh major release of Siebel eBusiness Applications. Siebel 7 (formerly referred to as Siebel 2001) reportedly provides the most comprehensive suite of packaged applications for customer relationship management (CRM) and employee relationship management (ERM), with the lowest total cost of ownership (TCO) so far. The enhancements worth pointing out are:

    * A new Web-based architecture

    * A formalized product upgrade and enterprise application integration (EAI) strategy

    * Enhanced features across all application, including new industry-specific versions

    * The formal launch of Siebel Employee Relationship Management (ERM)

This, Part Two of a two-part News Analysis discusses the Market Impact and makes User Recommendations. Part One details recent Siebel 7 product release. .

Market Impact

At first glance this announcement reflects too much of CRM related functionality (as seen by the length of the announcement), insufficient extended enterprise functionality (ERM portals and business intelligence have long been offered by many), an adequate architecture, and all these somewhat too late. The era of Siebel's uncontested supremacy in the CRM market for the past several years seems to be nearing the end, as one is to wonder whether the above-mentioned impressive CRM functional enhancements will suffice for fending off the competition.

In the current economic climate, Siebel's CRM-centric functionality bells-and-whistles may look ever less compelling, as enterprises with heavy ERP investments from ERP leaders-turned CRM wannabes will likely settle for currently less powerful CRM offering of those, in exchange for the potential long-term benefits of extended enterprise applications integration and subsequently lower TCO. The fact is also that the CRM functionality offered by ERP leaders will not necessarily be inferior in every case either. As the CRM market is maturing, most major players are functionally converging, which forces users to consider many other order winning criteria in their selection process.

Although Siebel's functionality in marketing campaigns, SFA, interactive (guided) sales, customer service, and PRM remains the deepest in the pack, SAP, Oracle, PeopleSoft, J.D. Edwards, and Baan have slowly but surely been closing the gap. As a matter of fact, many vendors often provide more CRM functionality than many customers require. Conversely, customers' perception of the scope of CRM does not often coincide with the pure CRM vendors' one.

As an example, many prospects view the order fulfillment and content management as a part and parcel of CRM, which is often not the case with many traditional CRM vendors. As a result, if the importance of order management and content management in a user's business strategy is great, one should not be terribly surprised if SAP or any other traditional ERP vendor outscores Siebel in the enterprise applications selection. This begs the question: when will Siebel move beyond fancy order capturing, contact management, and/or call center, and take on the user's entire order management process? In addition to order management capabilities, Siebel lacks a solid strategy to support a Private Trading Exchange (PTX), both of which are increasing in importance especially from a Business-to-Business (B2B) e-commerce customer management perspective.

Siebel has indeed shown a little support for transactional and order fulfillment capabilities so far, whereas many ERP vendors can offer the support for each stage of the customer life cycle - engage, transact, fulfill, and service afterwards. In any case, each of these is critical customer-facing process, and Siebel seems to be excelling only at the first and the last. As the Siebel 7 opportunity to deliver these was missed, time will only tell whether the company will deliver these sooner than its opponents will catch up within their sub-optimal areas.

The New Architecture

Possibly more prominent enhancement in Siebel 7 is the new architecture, with the Siebel's definition of a zero-footprint client. Given the depth of functionality in Siebel's long maintained traditional fat client/server environment, this was an immense effort and a strong step forward. Siebel deserves accolades for providing all of its rich functionality in a highly interactive environment while also minimizing the impact to an organization's network.

To achieve that, it has transitioned from a fat Windows client to HTML and Java script, while the underlying backbone and the data model on the server has not basically changed. If one is to be nitpicking, the client footprint is not exactly zero - it requires some memory for Java script and several Java applets for administrative processes to support Computer Telephony Integration (CTI), its menu structure, and some of the graphical elements to be downloaded at the start of the session.

As Java applets require a Java Virtual Machine (JVM) loaded and maintained on the client, Siebel, likewise Oracle and SAP, had to turn to that in order to maintain its proprietary graphical user interface (GUI) tailored for power users in, e.g., sales departments or call centers. PeopleSoft, on the other hand, has allegedly opted for the simplicity of a native Web browser experience (although many claim that it was the easiest way out of the fat two-tier client/server architecture). One client option is not universally better than the other, as it is time and again subject to the needs and the preferences of each user class. PeopleSoft should therefore start rethinking its value proposition scope beyond the already hackneyed mantra "no code on the client" - touting that to a less technologically aggressive enterprise would have a similar effect like a car dealer touting the sport alloy wheels to senior citizens.

Integration

Nevertheless, while Siebel applications will also support interoperability with Component Object Model (COM), Common Object Request Broker Architecture (CORBA), and Enterprise Java Beans (EJB) environments, the provided applications programming interface (API) connectors to third-party product will integrate at merely a superficial data level.

In maintaining its functionally overwhelming and monolithic product, Siebel is showing another aspect of resemblance to SAP's predicament of the late 90s. Although Siebel's moves towards delivering industry templates and the solutions for mid-market are commendable, not much will change until the company breaks its suite into more granular components and delivers implementation and customization tools. Customers will increasingly opt for competitors products that may have less functionality, but are much more implementation and customization friendly. The recent fallout with J.D. Edwards (see J.D. Edwards Fires Siebel, Hires YOU), as well as Microsoft's polygamy with Pivotal are some examples. Moreover, some mid-market ERP vendors already offer sound CRM offering (e.g., Epicor Software, Infinium), many current Siebel ERP partners are increasingly delivering their CRM capabilities (e.g., Navision), while many smaller ERP vendors without CRM offering will rather opt for an alliance with the likes of Interact Commerce.

Consequently, sooner or later, Siebel will realize the need to open and/or componentize its product. At the moment, we believe the company is torn between pro et contra of the approach - while it could incrementally (module by module) penetrate and possibly grow to a major presence in accounts where it currently has none. Conversely, its leverage in current accounts may wear away module by module, as the customer's ERP provider comes up with an equivalent CRM functionality.

Upgrades

Like many other applications vendors, Siebel faces the challenge of offering existing customers painless upgrades too. While the fact that more than 90% of Siebel's customers are on the current version (Siebel 6/Siebel 2000), one should note that the previous product releases all shared almost identical client/server architecture. Therefore, upgrading to the new Web-based architecture of Siebel 7 will require a more painstaking approach than it was the case with previous feature/function release enhancements only. The new Web client will not support most of the client-side customization (through, e.g., Visual Basic or COM components) that customers might have had to turn to in the previous releases.

Siebel has traditionally provided its Siebel Application Upgrader to facilitate customers through the migration process, but Siebel 7 Upgrader will not seemingly provide any conversion assistance for client side. As customers will have to reconstruct existing client-side customizations on a server, one should reckon with spending significant time, money and human resources. Customers will also have to learn new methods of GUI customization, given that Siebel has introduced new client-side technology. Siebel's lack of system management and testing capabilities (like e.g., SAP Computing Center Management System (CCMS) or PeopleSoft OEM-ing Tuxedo) is becoming ever more noticeable. Therefore, the cost/benefit ratio of a transition to the Siebel 7 may be less compelling to customers, which will likely postpone the upgrade until the benefits are much clearer than a mere thin-client offering.

Competitive Pressures

While Siebel remains strong company, with more than $1.5 billion in cash and yet to report a losing quarter, with the largest roster of trained and certified system integration (SI) partners, and with strong industry focused CRM offerings, for the first time, it may have to consider more competitive pricing and a less conceited sales approach. As the competition will fly from all directions and the license revenue will likely decline, the company will have to make it up by emphasizing own professional services revenue. Its external partners will therefore be unimpressed by a constricting size of the SI pie slice, and will be tempted to switch to competitors' products. Time will only tell how Siebel will overcome first major hardships in its until now spotless history.


SOURCE:
http://www.technologyevaluation.com/research/articles/besieged-by-the-crm-throne-aspirants-king-siebel-delivers-the-magic-no.7-part-2-market-impact-16553/

Siebel Rallies Its Integration Alliance Troops

On April 8, Siebel Systems, Inc. (NASDAQ: SEBL), the leading provider of customer-centric eBusiness applications software announced its intention to release a set of application integration tools in the second half of 2002. The new products intend make it easier for organizations to exchange data between Siebel's CRM system its other vendors' business applications. A standards-based and vendor-independent application integration solution called Universal Application Network (UNA) is touted to dramatically reduce the need for custom integration, thereby minimizing complexity, speeding deployment and delivering a low total cost of ownership (TCO). Leading system integrators such as Cap Gemini Ernst & Young, Accenture, IBM Global Services and KPMG Consulting, and application integration server vendors including IBM, SeeBeyond, TIBCO Software, Vitria, and webMethods, have all committed technology and expertise to deliver the Universal Application Network. The most recent to join in was BMC Software on April 22.

Siebel Systems believes it is positioned well to deliver this solution through its open architecture, industry specific domain expertise and extensive partner ecosystem

This is Part 2 of a 2-part analysis of recent Siebel Systems' product announcements.

For details on the announcement see Part 1.

Increasing Competition

The era of Siebel's uncontested supremacy in the CRM market seems to be nearing the end, also owing to both Tier 1 ERP vendors intrusion of the CRM space and to some mid-market CRM vendors coming of age. Although Siebel's moves towards delivering industry templates and the solutions for mid-market are commendable, not much will change until the company breaks its suite into more digestible components and delivers simplifying implementation and customization tools.

Customers will increasingly opt for competitors' products that may have less functionality, but are much more implementation and customization friendly, and possibly offer tightly integrated solution. The recent fallout with J.D. Edwards (see J.D. Edwards Fires Siebel, Hires YOU), as well as Microsoft's delivery of its own CRM product (see Microsoft Throws .NET At SMEs, With CRM As Bait) and Microsoft's polygamy with CRM mid-market stalwarts Onyx and Pivotal are some examples. Moreover, some mid-market ERP vendors already offer a sound CRM offering (e.g., Best Software, Epicor Software, Infinium), many current Siebel ERP partners are increasingly delivering their CRM capabilities (e.g., Navision, Microsoft Great Plains), while many smaller ERP vendors without a CRM offering will rather opt for an alliance with the likes of Interact Commerce or FrontRange, or will pursue a delivery of their own CRM components (see Mid-Market ERP Vendors Doing CRM & SCM In A DIY Fashion).

In the current economic climate, Siebel's CRM-centric functionality bells-and-whistles and an adequate Web-enabled product architecture may look ever less compelling even to the higher-end of the market, as enterprises with heavy ERP investments from ERP leaders-turned CRM wannabes might settle for likely less powerful CRM offering of those, in exchange for the potential long-term benefits of extended enterprise applications integration and subsequently lower TCO (see Integration is the Name of the Game in Software Systems).

The fact is also that the CRM functionality offered by ERP leaders will not necessarily be inferior in every case either. As an example, if the importance of order management and content management in a user's business strategy is great, one should not be terribly surprised if SAP or any other traditional ERP vendor outscores Siebel in the enterprise applications selection. This has long begged the question when Siebel would move beyond fancy order capturing, contact management, and/or call center, and take on the user's entire order management process. Siebel has indeed traditionally shown a little support for transactional and order fulfillment capabilities, whereas many ERP vendors can offer the support for each stage of the customer life cycle - engage, transact, fulfill, and service afterwards. In any case, each of these is a critical customer-facing process, and Siebel seems to have excelled only at the first and the last. As the Siebel 7 opportunity to deliver these was missed, time will only tell whether the Siebel 7.5 will deliver these sooner than its opponents will catch up within their sub-optimal areas.

Nevertheless, Siebel's idea of its Universal Application Network seems innovative and should help the needs of the higher-end of the market, whose paramount concern have been the enormous costs of integration and the general lack of responsiveness by enterprise application vendors to address this issue. Siebel's embracement of standards-based Web services as a technology enabler may appeal to customers that are keen on preempting dependencies on proprietary Application Programming Interfaces (APIs). Although Siebel is not the only one to go in this direction given J.D. Edwards' OneWorld eXternal Process Integration (XPI) "middleware-in-the-box" approach and SAP's recent subscription to Web services and business process integration (see SAP Opens The 'Miss Congeniality' Contest), Siebel might be going a step ahead by gaining the endorsement of several prominent enterprise application integration (EAI) suppliers and systems integrators (SI) for an initiative to standardize EAI.

Although integration servers may reduce that complexity to a degree because all the applications plug into a central hub, the EAI servers themselves tend to be proprietary and non-standard. The customers are increasingly desiring to do away with point-to-point integration approaches at that data level (with extensive lists of custom APIs and connectors/adapters) and to replace it with more inter-enterprise ranging integrations, based on business processes that extend beyond the traditional definitional boundaries of a single application suite.

Therefore, Siebel's strive for standards-based business processes to plug into industry-standard servers, may raise the least common denominator of interoperability. Siebel had no better option to pursue though given the lack of its own back-office offering and its adoption by a diverse population of ERP users. This is also the chance for these EAI vendors to devise an answer to SAP's business process level of integration and modeling (via SAP new tools like Solution Maps, C-Business Maps, and Solution Composer), in addition to their offerings' immaculate transactional performance. Furthermore, the move will help Siebel open and/or componentize its product, as standards like eXtensible Markup Language (XML) and eXtensible Stylesheet Language (XSL) make it possible to share data and have a common look-and-feel across an application, without necessarily digging in the source code. Provided that, Siebel could incrementally (module by module) penetrate and possibly grow to a major presence in accounts where it currently has none. Conversely, its leverage in current accounts may wear away module by module, as the customer's ERP provider comes up with an equivalent CRM functionality.

SOURCE:

http://www.technologyevaluation.com/research/articles/siebel-rallies-its-integration-alliance-troops-part-2-market-impact-16654/

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Oracle: The financial services' do or die - networked consumer relevancy

The internet has changed the way consumers conduct business. Prior to making a purchase, consumers use social networking groups on the internet to obtain vendor recommendations, product reviews, and tips on good deals. They also use a variety of Web 2.0 technologies and tools — from blogs to chat rooms and social networking sites — to tell others about their experiences with companies. Such prevalent peer-to-peer consumer interaction has changed the way companies can attract new customers and retain existing ones.
Companies can no longer employ traditional marketing techniques to lure new customers.

Instead, they need to gain an understanding of how consumers use the internet as a purchasing tool, pay attention to how companies are perceived on the internet, and leverage today's social networking tools to find innovative ways to engage the consumer.

This is particularly true for the financial sector, which was hit hardest by the globally depressed economy and has seen customer trust and satisfaction decline to new lows.

To persevere today and be successful tomorrow, the financial sector must embrace the new social networking paradigm to find new ways to go to market.

Contents:
- Financial institutions face a historic turning of the tide
- Consumer in control
- Why do consumers want control?
- What does this mean for financial institutions?
- Does this new world represent opportunity or risk for financial institutions?
- Succeeding in the social marketplace