21 October 2002 Customer relationship management (CRM) software specialist Siebel Systems will today announce a web services marketing and technology alliance with software giant Microsoft.
Siebel is expected to commit to Microsoft’s .Net software for web services – an approach to building applications that uses a universal set of standards to enable the ‘discovery’, assembly and execution of application modules over the Internet and deliver them as a service. A key thrust of the alliance will be to improve the interoperability of both company’s software.
Siebel’s move is significant because they are one of the first major business application vendors to declare support for .Net, according to industry analysts.
However, Siebel will not commit exclusively to Microsoft .Net software. The company is expected to also announce support for rival web services standards, notably Sun Microsystems’ Java 2 Enterprise Edition (J2EE) platform.
The announcement is a bold step for Siebel, which could ultimately find itself competing against Microsoft. This is because Microsoft has said it plans to roll out its own CRM software by the end of 2002. Microsoft’s CRM software will be based on technology from the company’s December 2000 acquisition of mid-market business applications vendor Great Plains.
To allay Siebel’s fears, Microsoft claims it will concentrate on the CRM mid-market and will not sell into the high-end market where Siebel is dominant. However, Siebel and Microsoft discontinued a deal whereby Great Plains resold Siebel’s software earlier in 2002.
Siebel will make its announcement at the company’s conference in Los Angeles this week. The fact that Microsoft chairman Bill Gates will also deliver a keynote speech at the conference led to feverish speculation among some analysts that Microsoft was about to make an equity investment in Siebel – or acquire it outright.
However, Siebel CEO Tom Siebel swiftly dismissed such talk in an earnings conference call last week. He also had to explain Siebel’s latest disappointing financial results.
Siebel Systems’ revenues slumped by 18% to $357.2 million (€367.3m) for its third quarter of 2002. More ominously, new software licence sales fell to $126.8 million (€130.4m), compared to $193.5 million (€199m) in the third quarter of 2001.
