The History of Siebel CRM
Siebel Systems Inc., a software company founded by Thomas Siebel and Patricia House, was the dominant vendor of customer relationship management products in the late 1990s. It entered into a decline after the dot-com bubble burst in 2000, as its high-end customers decided they wanted a more integrated suite of software, moving to full-service business software companies such as SAP and Oracle. Oracle purchased Siebel in 2005 and continues to use "Siebel CRM" as a brand name.
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Founding
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Siebel and House in essence created the market for packaged CRM software. The company's first flagship product was designed to automate the sales function. Later versions of this product, Siebel Sales Enterprise, integrated marketing and servicing actions with sales. Siebel CRM early won major clients including Charles Schwab and Andersen Consulting. The CEO of Andersen Consulting, George Shaheen, became a member of Siebel's board of directors in 1995. Siebel Systems went public in June 1996.
Success
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At its peak, Siebel controlled 70 percent of the CRM market. Its late 1990s' client list included IBM, Compaq and Cisco Systems. Some observers credit the company's success to the intense focus on customer satisfaction on the part of its leadership -- they were applying the same principles of CRM that they encoded as software. They also made strategic acquisitions: buying Interactive WorkPlace and Nomadic Systems in the third and fourth quarters (respectively) of 1997. Interactive offered business intelligence software; Nomadic created software specifically aimed at the pharmaceutical industry. In October 1998, Siebel Systems formed an alliance with Active Software, which thereafter made connectors integrating Siegel with packages from Oracle, SAP, Baan and PeopleSoft. But those firms had taken note of Siebel's earnings growth and were intent on moving into CRM themselves. PeopleSoft acquired its own CRM vendor, Vantive, in 1999.
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Troubles
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In the new millennium, Siebel passed the $1 billion mark in revenue, but soon began leaking customers, as the post-bubble customer base became more demanding and wanted integrated products. Between 2001 and 2005, according to a story in "Computerworld" in April 2005, Siebel had lost 40 percent of both its revenue and its employees. There was also hectic turnover at the top of the corporate ladder during this period. In 2004 the founder, Thomas Siebel, was replaced as CEO (though he remained chairman), and the board brought in Michael Lawrie as the new CEO. Lawrie didn't last long -- he left in 2005, replaced by board member Shaheen.
Oracle Purchases Siebel
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Oracle -- a Redwood Shores, California, business-software giant -- purchased Siebel for $5.8 billion in September 2005. This was widely seen at the time as a move in Oracle's then-intensifying competition with SAP. Earlier that year, Oracle had purchased PeopleSoft, also as part of its positioning vis-a-vis SAP. The $5.8 billion came to a per-share price of $10.66 to Siebel's shareholders, a premium of close to 17 percent over the previous Friday's closing price. At the time the deal was announced, Oracle's CEO, Larry Ellison, said that Siebel's CRM would become the centerpiece of Oracle's CRM marketing -- as it has since become.
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References
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