A look at Siebel

This week Network World Senior Editor Ann Bednarz looks at CRM powerhouse Siebel Systems.

She notes that Wall Street went easy on Siebel Systems recently after the vendor warned it would miss its first-quarter earnings estimates.  Blaming a weak economy and a handful of postponed sales, Siebel said it will post lower-than-expected total revenue of $330 million to $335 million and license revenue of about $112 million when it officially announces its quarterly results later this month. Nonetheless, Siebel’s stock rose 24 cents to close at $7.99 on the first business day following the negative news.

One reason for Wall Street’s light-handed treatment of Siebel is that analysts were expecting the miss. Investment research firm Goldman Sachs called Siebel’s license revenue shortfall “pretty significant” – Siebel in January provided license revenue guidance of $130 million to $150 million – but said there was broad anticipation that Siebel, like many other software companies, would pre-announce missed earnings.

That’s not to say Siebel can breathe easy. To stay in the good graces of Wall Street and customers, the vendor needs to adjust its product development and sales strategies to address current buying trends, experts say. Smaller, slower-to-close deals along with mounting competition and executive turnover are threatening the CRM market dominance which Siebel has enjoyed over the last few years.

While it’s still the clear leader among CRM suite vendors, Siebel definitely has challenges ahead of it.  For example, it will be or is already facing:

* Increased pressure from ERP players.https://www.nwfusion.com/news/2003/0414siebel.html

* Sales management turnover.

* Shifting sales strategies from large to smaller-sized deals.

For lots more on Siebel’s strategy see: