CEO Siebels New Directions

Tom Siebel claims Siebel Systems is committed to Java and .Net and sees its future in the direct-sales model.

Tom Siebel, CEO of Siebel Systems Inc., is clearly bothered by the health of the tech sector and the downturn in IT spending. Now hes predicting a huge consolidation in the industry, and he said the number of influential companies can be counted on one or two hands.

This hasnt constrained the level of energy hes putting into his company. Siebel recently signed a major strategic alliance with Microsoft Corp. while remaining committed to Sun Microsystems Inc.s Java. How does Siebel think these conflicts will play out? Last week, eWeek Labs Director John Taschek sat down with Siebel at the companys User Week conference in Los Angeles to discuss this and more.

eWeek: How committed is Siebel to .Net?

Siebel: Were completely committed to Web services with the next generation of technology. Its going in lock step with the people. Were supporting [Java 2 Enterprise Edition] and .Net; well support [Windows] NT and Unix.

eWeek: Will Microsoft be a competitor in the midmarket or the large enterprise?

Siebel: Ive been hearing this [question] for nine years. Microsoft is one of the largest customers of ours. If and when they make a decision [to go into the enterprise customer relationship management space], theyll be a very capable competitor.

eWeek: Were you surprised by Microsofts purchase of Great Plains Software Inc. and Navision S.A.? Do they create a threat?

Siebel: Right now, Microsoft is not at all, its not a threat. [Its target CRM market is] too small. Siebel focuses on medium and large enterprise customers.

eWeek: IBM claims to have three times the number of Siebel-trained consultants as Siebel. Will Siebels support of .Net affect the relationship?

Siebel: I have no idea about IBMs claims. IBM is a huge customer. They have a huge development team. Im certain the relationship is secure.

eWeek: Will Microsoft remain a Siebel customer?

Siebel: Yes. But this deal is independent of Microsofts role in being a customer.

eWeek: Is the direct-sales model working, or are you moving to a broader channel market?

Siebel: Direct sales is the way to go when theres so much technology transfer.

eWeek: It sounds as though youre simplifying services and perhaps reducing the need for the services.

Siebel: Are we reducing services? Yes. It reflects the market. However, we dont anticipate price changes.

eWeek: In 1999, Siebel and Great Plains signed an expansive partnership to deliver front-office solutions tailored to the midmarket. Why did that partnership end?

Siebel: We decided that we were putting too much energy into the relationship and not distributing that much software. ... Great Plains felt the same way.

eWeek: Where is most of the business activity, in the large enterprise or with the midmarket?

Siebel: It is across [both market segments]. The [bulk of our] revenue [is] predominantly with companies with greater than $100 million in revenue. The volume is in midsize and large enterprise. The volume is probably more on the midmarket, but the revenues are split. This has been true for the last 20 years.