SAP 'Safe Passage' Program Targets Siebel's Base

SAP AG on Monday extended its "Safe Passage" program to Siebel Systems customers looking to jump ship for another customer relationship management platform such as mySAP CRM. Not surprisingly, SAP introduced Safe Passage on the opening day of the Siebel CustomerWorld conference in Boston. SAP's move is prompted by Oracle's deep pockets and enterprise applications buying spree. Oracle opened its wallet in September and agreed to shell out for Siebel approximately $5.85 billion, or $10.66 per share.

The Safe Passage program offers Siebel customers training, services, a roadmap to integration with other enterprise applications, and up to 75% credit on previous Siebel purchases to put toward SAP licenses and software. "If you spent $1 million on Siebel licenses in 1999, you'll receive $750,000 credit toward SAP purchases," said a SAP spokesman. "It also provides immediate access to the SAP NetWeaver platform, which includes integration capabilities and application functions like portals."

SAP will initially offer the deal to U.S. customers only, but the plan is to eventually roll it out worldwide. So, it's logical that leading U.S. Siebel customers to safe passage is ex-Siebel worldwide vice president of sales, Bill McDermott, who jumped ship in 2002 to become SAP America Inc. president and CEO. "SAP is obsessed in building the best applications software in the world," said McDermott in an interview last month at SAP America's headquarter in Philadelphia. "That includes CRM applications."

The acquisition gives Oracle a boost in the CRM market that AMR Research forecasts will reach $11.4 billion in 2005. Prior to the deal, SAP took the top CRM vendor space with revenue forecast this year at $1.7 billion and a 15% market share; Siebel was second in the market with about $1.3 billion in revenue, estimates the research firm, said AMR Research.

This is not SAP's first Safe Passage program. The initiative launched in January shortly after Oracle completed the PeopleSoft acquisition. SAP extended the program to PeopleSoft, J.D. Edwards, and then Retek customers as Oracle's sting of acquisitions grew.

SAP hasn't welcomed travelers to mySAP CRM through Safe Passage just yet. But the vendor isn't expecting "huge numbers" of Siebel customers to step up immediately. SAP believes companies that run its apps alongside Siebel will join first, similar to what they saw earlier this year when the vendor targeted the program toward PeopleSoft and J.D. Edwards's customers.

Many J.D. Edwards and PeopleSoft customers that came on board through Safe Passage ran the apps somewhere in their enterprise alongside SAP apps. Perhaps integrated them with an SAP manufacturing platform where J.D. Edwards is deployed at smaller plants and SAP at the mother-ship. About 30 J.D. Edwards or PeopleSoft customers have migrated to SAP, the vendor said.

Although the Siebel acquisition is pending, Oracle wants customers to know it's serious about CRM. Monday, Siebel launched Siebel Customer Adaptive Solutions, the vendor's strategy and vision for the next generation of CRM.

The software and services offering range from Siebel Customer Adaptive Architecture based on an open-standards SOA framework to let customers configure applications as needed; to Customer Experience Blueprint, a six-step roadmap to results; to Customer Data Integration, integration for processes, automation and regulatory compliance capabilities.

It also includes Siebel Business Analytics, an applications suite providing historic, real-time and predictive data throughout the enterprise from finance to supply chain to human resources to sales to marketing and service; Siebel 7.8, a suite of industry-specific business applications; and Siebel Component Assembly, building blocks to help companies develop custom CRM applications quickly through a graphical workbench and tools such as Microsoft .Net.

Meanwhile, SAP continues to woo Siebel's customers to move onto mySAP CRM. For holdouts that have stuck with Siebel, some analysts believe the acquisition and SAP's Safe Passage program may be the catalyst to make the leap.