Siebel Boss Warns of B2B Shakeout

By Matthew Hicks  |  Posted 2001-04-09 Print this article Print

If you listen to Thomas Siebel, the worst has yet to come for business-to-business software vendors.

If you listen to Thomas Siebel, the worst has yet to come for business-to-business software vendors. "On the B2B exchange side, I dont think anyone will survive. They are all gone," the chairman and CEO of customer relationship management software vendor Siebel Systems Inc. said at Forrester Research Inc.s B2B Technology Leadership Forum in Scottsdale, Ariz., last week.

But, Siebel added, the resulting consolidation will be a good thing for customers and surviving B2B software developers.

Siebels dire predictions came on the same day that B2B software stalwarts Ariba Inc. and i2 Technologies Inc. warned of lower-than-expected earnings and widespread layoffs. When questioned about the earnings outlook for Siebel Systems, of San Mateo, Calif., Siebel declined to comment.

Siebel specifically cited B2B e-marketplaces and application service providers as the types of B2B companies that will be hardest hit by what he called the "global economic recession."

Technology vendors can no longer count on customers giving them the benefit of the doubt and dabbling in a new technology investment just because of Internet hype, Siebel warned.

That transformation, in the long term, he said, will help rather than hurt the technology sector, and companies that deliver products with the most value to customers-not the most hype-and those that concentrate on customer satisfaction are most likely to survive as customers become highly selective.

Vendors will consolidate, helping customers better wade through what has become an overwhelming number of software options, Siebel said.

"When we emerge out of this next shift, the world will be a saner place," Siebel said. But for now, he added, "you really need to look carefully as you plan whom your partners are going forward."

Matthew Hicks As an online reporter for, Matt Hicks covers the fast-changing developments in Internet technologies. His coverage includes the growing field of Web conferencing software and services. With eight years as a business and technology journalist, Matt has gained insight into the market strategies of IT vendors as well as the needs of enterprise IT managers. He joined Ziff Davis in 1999 as a staff writer for the former Strategies section of eWEEK, where he wrote in-depth features about corporate strategies for e-business and enterprise software. In 2002, he moved to the News department at the magazine as a senior writer specializing in coverage of database software and enterprise networking. Later that year Matt started a yearlong fellowship in Washington, DC, after being awarded an American Political Science Association Congressional Fellowship for Journalist. As a fellow, he spent nine months working on policy issues, including technology policy, in for a Member of the U.S. House of Representatives. He rejoined Ziff Davis in August 2003 as a reporter dedicated to online coverage for Along with Web conferencing, he follows search engines, Web browsers, speech technology and the Internet domain-naming system.

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