Will Nice(r) Sell?

Izmocars' Soni says he likes the fact that Siebel took customer feedback to make improvements, including letting users branch into another procedure without going back to the start screen and giving users more control over workflow, such as changing layouts or triggering alerts to fill in information fields. Those weren't added costs but part of one of six upgrades to the hosted, on-demand environment last year.

Siebel knows it can't rest on its success from a technology perspective. Lawrie is most concerned with the competitive threats from two companies: SAP, which has leveraged its dominance in back-end systems to be a major force in front-office applications such as CRM, and Salesforce, which took the early lead in the on-demand market where Siebel still is playing catch-up.

For Lawrie's growth plans to work, Siebel will need to take on an even wider array of competitors as it moves into new markets. It's scouring the market for potential acquisitions that would help it offer more customer-facing systems--products along the lines of the customer-self-service software it added with its $115 million acquisition of Edocs Inc. last year. This week, Siebel released the latest version of its on-demand customer-relationship-management product, Siebel CRM OnDemand, which features an option to include call-center capabilities as part of the bundle, technology it acquired when it bought Ineto Services Inc. in January 2004.

The company also continues to beef up its analytics offerings--putting it in competition with well-established business-intelligence vendors--so customers can tap more information systems to act on customer data. Siebel has even sold those applications to a few non-Siebel customers. It's working on a response to customers who want Siebel as a hosted service but want all the functions of the full Siebel suite and don't want their customer data stored alongside that of any other companies. And it's trying to piggyback on companies' desires to outsource processes such as customer service by enabling outsourcing firms to offer Siebel functionality. "The advantage Siebel has versus others is that it's the same data model across those different delivery models," Lawrie says.

So besides a friendly face, what does Lawrie have to offer Siebel customers? He's promising to help businesses make better use of their customer information. To that end, he's aggressively pushing two Siebel technologies: its Universal Application Network middleware integration architecture and its Universal Customer Master, a tool for integrating customer data that promises that most elusive of business goals, a single record of a customer. "If you didn't have a chart of accounts for a general ledger, there's no way you could manage the financial transactions of a company," he says. "Yet most companies don't have a master record of their customers, so how can they manage them as a real asset?"

Lawrie criticizes Siebel for not knowing enough about its customers. "You talk to my CFO, and he'll tell you the cost of a paper clip," he says. "But if you go and start talking to people and say, 'What do your customers really want to buy from you? How have those patterns shifted over time? What segments are really moving toward analytics? What segments really need order management? Is this really as important to manufacturing as it is in the financial-services sector?' they have no clue, because we haven't viewed customers as one of the most important assets that a company has."

To drive home the message, Siebel is preparing a new marketing campaign built around a tagline as painfully obvious as it is plainly appropriate: It's all about the customer. "People can't rally around complexity," says Lawrie. "They can rally around simplicity. Hence, 'Siebel, it's all about the customer.'"

Mission or marketing? Companies such as ATB Financial, a Canadian retail bank with $14.3 billion in assets, will provide the proof. ATB Financial has been a Siebel call-center customer for six years. It's preparing to integrate its call-center software with the teller application it purchased last year from Eontec Ltd., before that company was acquired by Siebel. So far, as questions have come up around the integration, Siebel's primary response has been to explore ways to smooth the project, whereas previously it might have recommended upgrading the call-center deployment, says Ken Casey, senior VP of retail banking delivery. It seems to be more about helping find solutions instead of constantly selling. "It's sort of corny, but as a customer, you notice that," Casey says. "I'm happy with their desire to work with us to find a solution for existing technologies and how we can better utilize them rather than necessarily trying to sell us something new."

It's a start, but the proof will be if Siebel can afford to spend the time continuing to work with Casey and similar companies. The old Siebel tended to move on to other priorities, assuming the sales cycle had ended until ATB was due for that call-center upgrade. Will Siebel create enough incentives for Siebel staff to keep a midsize customer such as ATB Financial happy when it's not writing new checks?

Lawrie contends that, in fact, that's where the real money is--in being a company not just focused on selling software and maintenance, but one that looks at companies' problems in dealing with customer information, and sells anything from software to consulting to integration and other services. "The market that we used to participate in was basically a $20 billion market, and we had a commanding position in it," Lawrie says. "The new market that we are defining for ourselves is a $100 billion-plus market."

Adds Lawrie: "I'm just a simple boy who says it's better to compete in a $100 billion market than it is to compete in a $20 billion market."

Continue to the sidebars:
A Touch Of IBM: Freedom, But With Accountability
and Q&A: Siebel CEO On Strategy, Competitors, And Simplicity