Siebel Reports Impressive Year-End, 4Q Revenue Growth

Siebel Systems Inc., the leader in the customer-relationship management software market, widened the gap with its competitors with revenue growth of 89% for the year, rising to $391.5 million in 1998 from $207.6 million in 1997. Its profits for the year were $55.7 million, up 135% from $23.7 million a year ago.

Fourth-quarter revenue was $123.2 million, up 78% from $69.2 million in the same quarter in 1997. Profits were $19.9 million, up from $9.3 million. The company said growth was particularly strong in Europe, which doubled its revenue from the preceding year. Siebel expects Europe to make up 30% to 40% of its business eventually, and the company intends to bolster its investment in the region accordingly. The company also said it would boost investment in end-user support, such as training, and in its services side, such as help-desk outsourcing.

Siebel said it benefited from a "very large, very under-penetrated" customer-relationship management application market, and says it doesn't expect to be hit with the revenue slowdown that has troubled the supply-chain and enterprise resource planning markets. "Unlike companies in the back office space, we don't see any evidence of a slowdown in the market," says Pat House, Siebel co-founder and executive VP. "We see growth continuing to outstrip our expectations." The overall market, the company says, should continue to grow at a 50% rate.

Other front-office vendors, such as Clarify Inc., also benefited from the growing market in earnings announced earlier this week. Such growth on the part of independent front-office vendors is possible because the front office doesn't necessarily have to be integrated with ERP systems, says Joshua Greenbaum, president of Enterprise Applications Consulting Inc. ERP vendors, therefore, have less of impact when they enter the market. "Were there to be that tie-in," says Greenbaum, "sales-force vendors would be hurting the way the supply chain is."