Siebel CEO Lawrie Exits

Customers hope for no big changes following resignation.

Customers of Siebel Systems Inc. hope the company stays the course established by now-departed CEO Michael Lawrie, who resigned under pressure from the Siebel board of directors last week.

But longtime Siebel board member George Shaheen, who was appointed to replace Lawrie, gave little indication of his intentions for the company.

"I guess that if I had my hand in things I would say to Siebel to continue the SMB [small and midsize business] drive and plow that furrow while stabilizing the rest of the enterprise business, increasing the speed of return on investment by simplifying the software and not focusing on functionality," said Richard Napier, director of business development for InFact Group, which is both a Siebel partner and a customer of its Siebel CRM OnDemand hosted service.

"I think we are looking at a shift rather than a complete turnaround," said Napier, who maintains offices in Lausanne, Switzerland, and Plano, Texas.

Lawrie submitted his resignation at the request of the board, according to Siebel Chairman Tom Siebel, whom Lawrie, a longtime IBM executive, replaced as CEO last May.

Siebel said Lawrie was replaced strictly because of the San Mateo, Calif., companys poor performance. Siebel Systems announced last week that it will miss analysts consensus revenue estimates for the first quarter of this year by about $37 million and post a loss of between $7 million and $9 million.

"If you look at the companys results over the last four quarters, in general they did not meet investors expectations and did not meet internal expectations," said Siebel.

Seth Harris, managing director of the technology practice for executive search company DHR International Inc., said Lawrie was in a very difficult situation at Siebel: reporting to a tough, impatient chairman in Tom Siebel, a man known for giving top sales executives little time to show results when he was CEO of the company; overcoming Siebels history of expensive, difficult implementations of its core CRM (customer relationship management) products; and having to compete in new, more crowded spaces such as business intelligence and hosted application services to grow.

"Mike Lawrie, as good as he is, was a classic IBMer," said Harris in Burlington, Mass. "He did some of the requisite planning work that was necessary but might have been unaccustomed to the speed and execution that was necessary."

Sources close to Siebel said many top managers at the company felt it would take three to four years before the changes Lawrie was implementing would produce financial results.

Shaheen, 60, has been a member of Siebels board of directors since 1995. He was CEO of Andersen Consulting, now Accenture Ltd., for 10 years, guiding that company from $1.1 billion to more than $8 billion in revenues in that time. But he gave few specifics on what he will do differently from Lawrie.

"Well keep improving and delivering on the promise of value to our customers and the marketplace," he said.

Paul Stals, president and chief operating officer of Terry Hinge & Hardware, a subsidiary of Amersham Corp., another Siebel CRM OnDemand customer, said the change in leadership at Siebel is more a concern for shareholders than customers.

"If they get a better guy who improves the performance of the company, thats probably a good thing," said Stals in Van Nuys, Calif. "But I think the impact on us would be very minimal."