CEO Hire May Prove Too Little, Too Late for Siebel

By John Pallatto  |  Posted 2004-05-04 Print this article Print

Former IBM senior executive Michael Lawrie has the right stuff to be Siebel Systems' new CEO. But it's still questionable whether his expertise will be enough to overcome the fierce competitive forces surrounding the company.

It was a wise decision for Tom Siebel to give up the post of CEO of Siebel Systems Inc. in favor of a newly hired outsider. But the move comes none too soon.

This is a decision Siebel should have made at least two years ago as the company struggled to deal with the post-2000 IT recession, during a time when enterprises jammed the brakes on new technology investments.

There comes a time when a corporate founder and technological visionary such as Siebel cant carry a company to the next level–especially when economic conditions have changed the rules of the game.

Click here to read the details about former IBM exec Michael Lawries hiring as Siebels CEO. In the late 90s, as companies were expanding rapidly, they had capital budgets for new software that promised to provide productivity gains, such as customer relationship management (CRM), knowledge management, business intelligence and database mining. But sometimes these new installations didnt deliver results as soon as their customers wanted. Or, as happened all too often, the implementation was so fraught with problems that it failed altogether.

Another problem was that when the post-2000 downturn arrived, customers found that business restructuring changed their priorities, leaving them with neither the time nor the funds to make these expensive technology investments work. The new applications were scrapped when the organizations they were supposed to support were restructured out of existence.

Now, times have changed again. The economic recovery is continuing. Companies have more money to invest in IT technology. But they are being far more careful about which technologies they choose—and which companies they select to provide them.

That is where Siebels new CEO, Michael Lawrie, comes in. As a 26-year veteran of IBM, Lawrie brings the kind of experience Siebel needs to build a top-notch product development, sales and marketing organization.

Siebel is also dealing with several legal issues. After being fined by the Securities and Exchange Commission for violating financial disclosure rules, it is now fighting a shareholder lawsuit over alleged overstatement of its financial performance and expensing of employee stock options. Click here to read more about a class-action shareholder lawsuit that Siebel Systems is fighting. Lawries most recent post at IBM, as senior vice president and group executive for sales and distribution, put him in charge of a global operation that generated $80 billion in annual revenue.

The best possible postgraduate training course for an aspiring senior executive in the technology industry doesnt come from Stanford University, Harvard Business School or the Wharton School of Business. It comes from IBM. The company has provided chief executives for a host of companies throughout the industry.

Next Page: Lawrie confronts major challenges at Siebel.

John Pallatto John Pallatto is's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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