Feeds

Siebel teams with IBM in software climbdown

CRM OnDemand

  • alert
  • submit to reddit

Build a business case: developing custom apps

Siebel has formed a partnership with IBM to sell its CRM software over the internet as a low cost monthly subscription service.

This represents a climbdown by CEO Tom Siebel, who vocally dismissed the subscription model two years ago after a failed initial experiment with a spun-out business called Sales.com. This was merged back into the main company after a year and closed down in 2001.

However, now Tom Siebel says: "This is the way software is going to be delivered in the future". Under the new venture, called CRM OnDemand, Siebel will share the monthly fees of $70 per user with IBM, which will run the service from its own data centers. Users access it from a browser interface and pay by credit card.

Despite the failure of Siebel's Sales.com, other smaller companies in the field have done well with internet-based rental models, notably Salesforce.com and Netsuite, which is funded by Oracle's Larry Ellison.

Siebel, by contrast, has had a difficult year financially and saw new license revenue drop by 47% year-on-year in the first half of 2003. The problem with monthly pricing is the threat of undercutting Siebel's highly priced enterprise offerings. "They need to cannibalize themselves faster than we're cannibalizing them," said Marc Benioff, chief executive of Salesforce.com.

Siebel is trying to differentiate the IBM venture as being specifically for smaller companies, or for partners working with large enterprises. However, the $70 monthly fee could cost more over several years than Siebel's traditional licensing, which ranges from $1,500 to $2,500 per user upfront.

Related Research
Get the News IS Weekly Newsletter, click here

Boost IT visibility and business value

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
VVOL update: Are any vendors NOT leaping into bed with VMware?
It's not yet been released but everyone thinks it's the dog's danglies
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.