Siebel's New CEO Offers Little Information, Frustrating Analysts

Siebel Systems fired CEO Mike Lawrie because he couldn't execute. Now it hopes longtime board member George Shaheen will deliver the kinds of results shareholders demand.

That was about all the certainty coming out of the analyst conference call Siebel Wednesday, which can best be described as long on buzz phrases and short of specifics.

"As you're talking the stock has dropped 21 cents, and clearly there's disappointment that there's not any more specificity," one analyst, annoyed by the lack of useful information, told Siebel executives. "You're getting the real-time reaction here." Siebel's stock has now dropped 26 cents.

His frustration was echoed by numerous financial analysts, who could not shake Shaheen, newly named CEO of the San Mateo, Calif.-based CRM vendor, from his message of pursuing "customer value" as well as "sizing our infrastructure and related costs to our business."

One thing that Shaheen did make clear: He is not the interim CEO. But Shaheen would not discuss potential strategic changes to the company.

"We cover the traditional large end of the market. Our OnDemand product is giving us strategic opportunities to go-to market with our customers, and we are developing our small to medium size practice. At this time, we will continue to focus on those segments," he said. "Any modifications will occur after I've had time to examine them."

Shaheen shouldn't need too much time to come up to speed on Siebel's strategy and operations. He has spent 10 year on the company's board.

Shaheen takes over the CEO role from Michael Lawrie, who joined Siebel last May from IBM where, as senior vice president and group executive, he was responsible for IBM's worldwide sales and distribution efforts. Under Lawrie's tenure, Siebel has seen, at best, tepid quarterly results. Last week, however, the vendor shocked Wall Street with warnings that it expects to lose $7 million to $9 million in its first-quarter, ended March 31. At that time, Siebel management blamed the shortfall on customers opting not to buy in the final days of the quarter.

"After a comprehensive review of the company's operations and performance, the board determined a change was necessary," said Tom Siebel, chairman of the San Mateo, Calif., vendor of CRM software. "The board evaluated the operation and performance of the company in the last year, and it's all about acceptable performance," he added.

Under Lawrie's helm, Siebel had begun to put a toe back into the channel waters. Last December, the company announced a new midmarket strategy, and had signed on three new partners to go after licensed midmarket sales.

"I can't say I saw a lot of progress since that December announcement," said Mark Johnston, president of Tier1 Innovation, of Denver. "I wasn't seeing the execution, or a lot of traction for partners. I used to work for [Shaheen] back when he was a managing partner at Andersen Consulting, and I think he'll be much more focused on execution that Lawrie was. Lawrie had the ideas but not the execution. [Shaheen] understands the services business and the role of partners much more than Lawrie did. As a partner, I could not be more pleased."

Shaheen previously had spent 10 years as CEO of Andersen Consulting, during which revenue grew to $9 billion, from $1 billion. After leaving Andersen, he was president, CEO and, later, chairman of Webvan, while it burned through more than $600 million.