Purchase expands Siebel's hosted customer-relationship-management offerings.

Tony Kontzer, Contributor

January 20, 2004

2 Min Read

One month after launching a hosted customer-relationship-management service, Siebel Systems Inc. on Tuesday moved to round out its on-demand offerings with the $5 million acquisition of Ineto Services Inc., a provider of hosted contact-center services.

Calling the combination of Siebel CRM and the acquired Ineto service a "game-changing" development, Ken Rudin, VP and general manager of Siebel's on-demand product line, says the deal will let Siebel deliver contact-center capabilities to smaller companies that can't afford to build the required telephony infrastructure. It also will let companies beef up call-center operations to meet seasonal demand or set up a departmental call center.

Siebel sold more than 250,000 seats for its call-center software last year, Rudin says, bringing its total number of seats to more than 1 million. In December, it launched its Siebel CRM OnDemand, a move to compete with Salesforce.com Inc.'s on-demand CRM service, and says it has accumulated hundreds of business customers for its service in the weeks since.

Siebel already is offering the Ineto service, redubbed Contact OnDemand, as an add-on to its hosted CRM offering. Siebel has integrated phone-call-related information entered into Contact OnDemand with its CRM products, and in the second quarter of this year it will integrate E-mail and chat support with information in the CRM system.

CRM analyst Denis Pombriant, managing principal of Beagle Research Group, calls the acquisition "an important milestone in the marketplace." He says Siebel isn't the first CRM vendor to package hosted call-center capabilities with its core products--Salesforce offers some call-center services--but he says it's possible Siebel's technology will have more depth because it was designed as a standalone product rather than a component of a CRM suite.

The purchase of Ineto is the latest in a series of acquisitions Siebel has made in the past few years, with the most recent coming in October, when it paid $50 million for UpShot Corp. and its hosted CRM service. Siebel reports its fourth-quarter earnings Wednesday.

Siebel's Contact OnDemand sells for $100 a month per seat when paired with Siebel CRM OnDemand or the vendor's traditional CRM software. Siebel CRM OnDemand subscriptions run $70 a month per seat.

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