Tom Siebel, CEO of CRM software giant Siebel Systems Inc., laid down the gauntlet to smaller competitors during his companys first-quarter-earnings call last week.
"That anything other than a Tier 1 company can close any business at all is pretty incredible," Siebel said, predicting that 60 of the 80 companies that Siebel Systems competes with will be out of business by the end of the year.
Siebel was not alone in casting a pall over the customer relationship management landscape. Roger Siboni, CEO of E.piphany Inc., of San Mateo, Calif., another CRM heavyweight, also predicted a shakeout during his companys earnings call last week. Siboni predicted that 75 percent of E.piphanys competitors will have gone by the boards by the end of the year.
While less competition may benefit these two companies in the long run, both are going through some short-term pain. Siebel, also of San Mateo, and E.piphany each reported sales increases of more than 80 percent compared with the first quarter of last year, but that was short of what analysts had predicted.
As a result, both companies cut their work forces by 10 percent. Siebel announced a number of additional austerity measures, including the shuttering of its unprofitable Sales.com unit, scheduled for June 30. The hosted sales applications service had been due for an upgrade this month.
Michael Lodato, vice president of market development at San Francisco-based DigitalThink Inc., uses Sales.com as well as Siebel Sales Mid-Market Edition software. Lodato said he hopes Siebel will roll some of Sales.coms features into Siebel Sales.
Tom Siebel hinted at such a plan during his earnings call, saying the Sales.com resources will be "redirected" within the company, though Lodato said nobody from Siebel has been in touch with him about the companys plans.
Sales.com claimed 80,000 registered users, but it is unclear how many are active or how many use it for more than just a personal portal to pursue sales leads, as Lodato does, rather than as a transactional system.
"It provides services that help you to sell," Lodato said. "If they shut it down, I guess Ill have to find some other ways to get those efficiencies. The other [hosted sales applications] are more about cool ways to key data in."
But hosted applications providers such as Salesforce.com Inc. and UpShot Corp. are already lined up to take that business. And sales process management software vendor Salesnet Inc. quickly announced that it was abandoning its $495 setup fee in the wake of Sales.coms closing.
Siebel Systems, meanwhile, is looking to expand into other product areas. Last week, it launched Siebel Employee Relationship Management, a product in its e-business applications suite designed to improve human resources management and employee communications.