Siebel's Three-Pronged Focus

Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 15-Dec-2004 09:24 AM

Siebel has announced what it calls a new strategic business initiative: a comprehensive, "three-pronged" focus on the small and medium-size business market.

"Through the unique combination of a customer-centric go-to-market model, value-added partner ecosystem, and proven CRM offerings, Siebel Systems' SMB strategy addresses the specific sales, marketing and service needs of SMBs," according to the press release.

In the release, CEO Mike Lawrie is quoted as saying that "penetrating" the SMB market "is a key component of the next phase of growth for Siebel Systems."

What do you think of the move?

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 15-Dec-2004 09:28 AM

[For Bob Thompson]

Siebel has announced in years past that it will focus on the SMB space, and each time it's fizzled out with no results. What's different this time around? I think the main change, and reason for some optimism, is new leadership by ex-IBMer Mike Lawrie. IBM had a "big iron" heritage but figured out how to sell to small businesses, too. Siebel's strategy, as outlined in announcement Dec. 7, shows they understand that it takes a completely different approach.

Strategy is one thing; execution is another. If Siebel sticks to its game plan over several years, they could become a real SMB player. But I doubt they'll make much of a dent in 2005. Siebel's big-account, large-deal culture won't change with a press release. Nor can products and distribution channels be re-engineered overnight. Brands are notoriously resistant to change, and Siebel is still positioned in people's minds as a solution for large enterprises.

Let's keep in mind that IBM was in the dumps in the early 1990s, got a new CEO (Gerstner) and over several years re-emerged as the successful services-focused company it is today. (And IBM selling its PC business continues that trend.) Siebel has a chance to leverage its market-leading brand, product line and customer base into a long-term success story. But, like the IBM turnaround, don't expect instant
results.

Bob Thompson
Founder, CRMGuru.com

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 15-Dec-2004 09:33 AM

[Posted for Peter Callaghan]

The fact that many analysts are calling for the SMB market to grow to $3.5 billion by 2008 is enough to make any large enterprise software company want a piece of this market. We welcome Siebel back to this market as they, along with many other large enterprise software companies, can help raise the awareness of the benefits of CRM for small business.

The realities, however, are that SMB customers want CRM products designed specifically for business and available at a price they can afford. This, coupled with a channel that has realistic expectations of revenue-per-customer, could be the barrier to keeping Siebel channel partners motivated to service the SMB customer in the long term. Failure to address these barriers to SMB market entry will result in SMB customers seeing yet another large enterprise software supplier fade away from the SMB market as the forecast for the large enterprise market steadily improves.

Peter Callaghan, Vice President Sales & Marketing
Maximizer Software Inc.

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 15-Dec-2004 09:35 AM

[Posted for Zach Nelson]

I think they will be as successful as all the other Enterprise software firms who have tried to penetrate the SMB space (in other words, not very successful). In the applications market, no one has ever successfully met the needs of Enterprise and SMB customers, and I don't think Siebel will break that record!

Zach Nelson, CEO
NetSuite, Inc.
One System. No Limits

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 15-Dec-2004 02:34 PM

[For Dick Lee]

Bob,

Bottom line, what the SMB market needs is small footprint software with high extensibility and especially high configurability. Siebel is large footprint software, which Siebel "scales down" for the SMB market by limiting extensibility and configurability. So it doesn't matter how much sales effort Siebel puts against the SMB space. The product's wrong.

Dick Lee
High-Yield Methods

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 15-Dec-2004 02:37 PM

[For Jim Dickie]

Bob,

I listened to the announcement and have a couple observations.

1) I have known Bruce Cleveland since '85, and I think he is one of the brightest minds out there, so I hate to bet against him.

2) I agree SMB is growth market for CRM and is ready for solutions.

3) I do think local partner presence is a key to success.

Those things being said, I still have serious reservations that Siebel can pull this off in a meaningful way because:

1) SMB is not part of Siebel's DNA. I remember Tom Siebel making the Sales.com announcement in Chicago probably eight years ago--this generated a great deal of buzz, but ultimately it went no where. Then I started hearing Siebel salespeople presenting a Siebel-lite concept to the SMB, and that didn't set the world on fire, either. So saying you want the SMB market and getting it are two different things.

2) The SMB market is already served by players that people like. SalesForce.com, SalesNet, SalesLogix, Pivotal, etc. all cut teeth on the SMB marketplace, and according to our most recent sales effectiveness study, they are all continuing to grow install bases and have very loyal customers.

3) Some SMB firms may well want a full-service suite, and here Netsuite has a great, robust solution

4) A company name may get you invited to the party in the SMB market, as it did for Microsoft when they announced MS CRM, but even Microsoft has seen that name alone did not win them deals.

It will be interesting to watch this coming year, but a press announcement that you plan to dominate better be followed up with laser-like execution.

Regards,

Jim Dickie
Partner, CSO Insights
www.csoinsights.com

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Jay Curry
Guru
Member

Posted 16-Dec-2004 11:44 AM

The question is: can Siebel make money in the SMB market?

Cost of sales= high
Revenue = low

Jay Curry
www.jaycurry.com

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 04-Jan-2005 02:29 PM

[Posted for Marco De Veglia]

It's called market maturity, I guess.

In the early times, lots of makers, esotheric products and hyper-high prices.

In the maturity times, most makers close shops and the remaining streamline products and lower the prices so that the masses can buy.

The masses for CRM are clearly SMBs that have mostly the same needs as the Fortune 500 but far lower budgets.

Hence the Top of Mind brand for CRM, Siebel, decides it's time to go to the "mass market version" of CRM.

It remains to be seen how they will make the equivalent of an assembly line and "every color, if black" strategy for this very complicated product called CRM.

The ASP solution (Salesforce) is an ingenious one, but it requires a change of mentality, always the hardest thing to do. And the paradox is that SMBs that would benefit most from an ASP solution are the least ready to use it.

So, ASP is not the ultimate answer to CRM for SMBs, I guess.

But the real problem is making "partners" who are used to selling normal software, to understand CRM intricacies, how to really help clients get results, not just install and run a Siebel application.

Who's going to train them? How is the training going to be? The standard Siebel lingo isn't going to cut it, I suppose.

So, in my opinion: Right move. Let's see the implementation now.

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Posted 06-Jan-2005 09:32 AM

Through a unique combination of corporate gobledegook and a demonstration of linguistic nonsense, Siebels press release will make about as much sense to its'apparently "new" market as Serbo-Croat. Just because Siebel believes its' current CRM solutions are appropriate to the major corporate market iit doesn't follow that the same solution, or even an amended solution, will meet the needs of a market as diverse as that of the SMB's.
As a worrying introduction, this type of press release fails to inspire any confidence that it will be able to talk to the SMB marketplace in a language it understands.