The Death Match That Never Happened - Siebel vs. Salesforce

As a follower of news and articles revolving the Siebel world, you might have stumbled upon the Fortune article titled "Siebel v Salesforce — Lessons from the Death of a Tech Goliath" written by former Siebel Systems executive Bruce Cleveland.

Despite the somewhat misleading title which suggests that Siebel is dead (which it is clearly not), I enjoyed reading the article and following the discussion it spawned.

In the article, Bruce confronts the "nice tale" that David Salesforce defeated Goliath Siebel in the first decade of this century. Bruce argues, and I go 100% with him, that Siebel Systems was definitely on its knees between 2001 and 2004 due to a global recession but it didn't share the same market segment with the new player in the CRM SaaS market, Salesforce.com.

Image source: Wikipedia

I joined Siebel Systems in 2001 and witnessed how its upper management tried to avoid the unavoidable. Imagine, you have to go full stop from being the fastest growing company in history to actually laying off 40% of your workforce, giving in to the weak economy.

As we all know, Siebel Systems survived, albeit bruised and emerged from the recession with a renewed portfolio including

• Sales
• Service
• Call Center
• Customer Self Service
• Partner Relationship Management
• Marketing (now integrated with Siebel Analytics, the to-be Oracle BI flagship)
• Loyalty
• Product, Pricing and Order Management
• Master Data Management

The above is an incomplete list but still constitutes a suite of functionality available in more than 20 industry specific flavors that most vendors can just dream of today. I believe it was the wisest decision of the Siebel management to keep investing in development during the recession. "Hit the road running" was a phrase often heard in those days.

With a portfolio like the above, seeing Siebel only as CRM or Call Center software would have been a mistake in 2005, and it is even more so today.

With good reasoning, Mr. Cleveland lays out why Salesforce flourished while Siebel's sales slumped. Primarily because Salesforce was picking up customers in the SMB market, a market which Siebel tried to reach with its MidMarket offering but failed because even the stripped-down product was too complex for SMBs.

Siebel CRM is in its very DNA an on-premise product, designed for the needs of the biggest of the big global corporations. Siebel was into the cloud (or SaaS) business before it was cool, with sales.com and some years later with the much more successful Siebel CRM OnDemand.

CRM OnDemand continues to be hosted by Oracle and I would rather compare Salesforce's success in the SaaS market to how Oracle does with CRM OnDemand and its recent Sales Cloud product (based on Fusion Applications). Comparing Siebel CRM on-premise to a cloud product is too much an "oranges vs. apples" situation and if you are serious about your expertise in the CRM market, you should know better.

The focus of Bruce's article is on what companies can learn from Siebel's struggle and Salesforce's success, which makes it even better from an educational standpoint.

If you want to join the discussion, please also read Bruce's follow-up article on his own blog as well as Dave Kellogg's analysis.

Bruce has taken the time to comment on Dave's post and shares some more executive insight into the history of Siebel and why some decisions were made.

Fellow Siebelite Richard has also published his take on the Siebel vs. Salesforce story.

If you want a blast from the past, an interview with Bruce Cleveland from Nov 2005, shortly after Oracle announced to acquire Siebel Systems is found here.

Summary

While many people still are under the impression that Siebel CRM is dead, my personal experience and contact with students, consultants and customers confirms otherwise. With an unmatched array of functionality and Open UI, Siebel is well equipped to stay. In the future we might see attempts to move Siebel to the cloud but in its DNA it is an on-premise product, and a good one to that. So please stop comparing it to cloud based software.

have a nice day

@lex