Siebel Infuses SMBs with CRM

By Jim Wagner | Posted December 09, 2004

Executives at Siebel Systems said its competitors in the CRM space aren't doing enough to meet the needs of small- to medium-sized businesses (SMBs). So they have a plan to deliver it themselves.

The San Francisco-based software company is taking a three-pronged approach to delivering on its CRM Channel Program: a go-to-market model, a value-added partner program and proven CRM software.

According to industry analysts, there are more than 15 million SMBs worldwide and only two percent of those have implemented CRM in North America.

The traditional SMB vendors in the CRM space, such as Salesforce.com, Onyx, Pivotal and SalesLogix, have under-served their customers, said Siebel officials.

J. Michael Lawrie, Siebel CEO, said SMBs have spent considerable effort on improving the back-office, through databases and the like, and will increasingly focus on using that infrastructure to beef up the front office using software that will bring in more customers.

"This is where we believe a significant investment will be made over the next several years, so that companies can really begin to differentiate themselves versus their competitors by the experience they create for their customers," he said in a press conference Tuesday. "It's really as simple as that."

More than 60 percent of SMBs prefer a local or regional reseller to deliver the goods, not from a company located a state or continent away, said Bruce Cleveland, Siebel senior vice president and general manager for OnDemand and SMB, at the press conference.

This fact has led to one tier of Siebel's new SMB strategy — partnering with resellers to sign Siebel software.

The company will share commissions on the sales made by its reseller partners and help with co-marketing ventures. The SMB shift means a shift in the way Siebel's own sales force operates. Siebel "territory managers" will now work with their channel partners to develop joint business plans.

"We're team-selling; it's not about simply taking some software or some URLs, handing them to some partners and wishing them good luck," Cleveland said. "It's about actually sitting down with them, coming up with an account strategy in their territories; it's about training, education, marketing, selling and support. It involves every one of those elements that's built and baked into the program."

In addition to channel partners, Siebel is working with third-party software vendors to combine and provide complementary software offerings. Called the Siebel SMB Alliance Program, the invitation-only program allows developers access to Siebel APIs and development platform to create tailored CRM applications Siebel doesn't already serve.

Jon Van Duyne, senior vice president and general manager of Best Software, maker of the SalesLogix CRM product, said Siebel's announcement reaffirms the appeal of this marketplace, which it has been a part of since the mid-1990s. With a 90 percent annual renewal rate among its 6,000-plus customer base and more than 400 channel partners in the United States, he welcomes the competition, even from a company the size of Siebel.

"We drive our business at the speed of the customer, so another competitor isn't going to influence how we address our customer base," he said. "We feel that we know the SMB customer base inside and out; we've served them loyally for years, and we're going to continue to do that."

Alexandra Best, senior director of marketing at Pivotal, said Siebel's tried to show it is relevant in the SMB market segment in the past, and it has been interesting to watch their announcements.

"The jury is out, as the jury has been out four times, on whether they can actually make themselves relevant to the market," she said. "They've been challenged over and over again; Siebel, like some of the larger integrated CRM/ERP vendors, have been extremely successful at building a brand and being relevant to the large enterprise sector. And all of them struggle with their positioning for the mid-sized enterprise and smaller enterprises."

Liz Roche, a vice president at research firm META Group, said Siebel has been gearing up in the SMB market for some time and its success will be determined by the number of partners it makes with resellers and alliance members and how well the company executes on its new programs.

While the playing field for CRM vendors in the SMB space is not empty, she said, Siebel's is a good position to make waves with its new strategy.

"Siebel's strategy of providing deployment options is what will differentiate its mid-market offering versus someone like Salesforce.com," she said. "I also think that Siebel provides a growth path. Should an SMB become successful enough to grow up into a larger enterprise Siebel will be right there to grow with them."

Competitors in the SMB arena, like Onyx and Pivotal, have been beset with internal problems around business strategies, Roche said, but she expects more pressure from other enterprise vendors like SAP who will bring their own products to the mid-market.

Adapted from internetnews.com.

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