Siebel Systems kicked off the week of its overseas user conference, which begins Wednesday, with news of an acquisition and partnership.
Siebel is acquiring Eontec, which specializes in retail banking software, for an initial payment of $70 million, plus up to $60 million more in incentives during 2005 if financial targets are met. The Eontec buy adds branch teller and Internet banking capabilities to Siebel’s portfolio of CRM products for retail banks.
Siebel’s new partner is data warehouse leader Teradata. The two vendors are joining forces to more closely tie Siebel’s analytics software with Teradata’s database and data warehousing products.
Acquiring Eontec is a positive development for Siebel, according to Ken Carey, enterprise and application software analyst at Susquehanna Financial Group. “Our channel checks indicate that the market for retail branch banking solutions is accelerating as retail banks replace old technologies,” said Carey in an e-mail statement. “We believe this acquisition puts Siebel in a better competitive position to compete for the replacement of retail branch banking software.”
Indeed, Siebel is targeting banks that need to replace outdated teller systems which were not designed to work with the applications and infrastructure associated with newer customer channels, such call centers, the Internet and ATMs.
Eontec offers a suite of Java-based applications for handling branch, call center and Internet transactions. Combining technologies will allow Siebel to offer an integrated suite of financial transaction, CRM and business intelligence modules to help banks increase the profitability of their branch offices.
One new offering spawned by the acquisition is Siebel Branch Teller, which combines Siebel’s business intelligence features with Eontec’s transactional capabilities to increase cross-sell and up-sell opportunities.
Employees of Dublin, Calif.-based Eontec will join Siebel’s San Mateo, Calif.-based retail finance division; Eontec’s former CEO Patrick Brazel, will head the division.
News of Siebel’s acquisition and partnership follows mixed financial news from the vendor, which last week reported a sharp rise in first-quarter profit accompanied by a slight decline in total revenue.
Siebel reported net income of $31.7 million — an increase of 580% over the $4.6 million earned in the year-earlier quarter. Licensing revenue rose 13% to $126.8 million. However the boost to licensing revenue wasn’t enough to keep total revenue for the quarter from slipping 1% to $329.3 million, dragged down by declines in professional services and maintenance revenue.
Recent restructuring efforts, including a workforce reduction of about 10% last year, offset Siebel’s revenue decline. The company reduced the total cost of revenues and operating expenses for the quarter by $44.5 million compared to year-earlier figures.
Siebel plans to unveil the next version of its CRM suite, Siebel 7.7, later this week when it opens its Europe, Middle East and Africa user conference in Cannes, France.
