IBM, Siebel Ally on Hosted CRM Milestone

IBM and Siebel Systems have announced plans to work together to offer low-cost, on-demand and hosted customer relationship management services, a move the companies say will bring world-class software within reach of many small and mid-size companies.

The offering, known as Siebel CRM OnDemand, will be sold at a monthly price of US$70 per user and is designed to be ready to use almost instantly. It will enable companies and even individuals to manage contacts, identify sales opportunities, track products and prices, evaluate marketing campaigns and respond to customer service requests.

Financial details of the multiyear partnership covering sales, marketing, services and development were not disclosed. The two companies have established a joint board of directors to oversee the initiative and said they will put together a “multimillion-dollar integrated marketing campaign to achieve rapid market adoption.”

The news provided a boost to Siebel’s stock, which was up more than 7 percent to $11.32 early Friday. IBM shares were also up slightly to $91.26.

The Winner Is…

In addition to opening up new markets to Siebel, the partnership also gives an immediate boost to IBM’s on-demand initiative, which has become a major focus for the tech giant in the past year.

IBM spokesman Michael Rowinski told the E-Commerce Times that Siebel’s offerings are a logical fit for the on-demand model, because there is widespread demand for the functionality of CRM software but little appetite for spending on massive hardware and software configurations and integrations with existing systems.

“Companies want the flexibility that on-demand can provide,” Rowinski said. “This is an opportunity for smaller companies to get some of the same software and features that enterprises have been using at a far lower cost.”

Old Friends

The two companies are hardly strangers, having first linked up on the CRM front in 1999. Together, they service about 1,000 customers in the CRM arena using Siebel software and IBM database solutions.

Although the hosted product only has about 30 percent of the capabilities of full-blown Siebel deployments, it offers a tangible, affordable example of how hosted on-demand software, which can be adapted quickly to meet changing business needs, can help companies save money, IBM vice president Michael Lawrie said.

“Siebel’s entry into the on demand era is truly an important development for our industry,” he said in a statement, adding that it shows how IBM can reach out to “customers of all sizes through our network of business partners.”

Deployment Struggles

Meta Group analyst Steve Bonadio told the E-Commerce Times that the move is an important one for companies that want a flexible CRM solution that will grow with them and will help them make decisions based on their true software needs, rather than on expedience during deployment.

“It will save companies money and time in the long run, and that can only help the CRM industry,” Bonadio said. “Right now, a lot of enterprises struggle with the configurations and resources of a product and then don’t reap the benefits a program like CRM can provide. This takes all that out of the equation.”

To boost adoption, the companies are offering a free one-month trial of the solution. Also, they claim that when and if an organization decides it needs an on-site Siebel solution, migration will be “seamless” from the hosted product.

Earlier this year, Siebel and IBM agreed to work together to develop Siebel solutions that would work with IBM’s WebSphere platform and that were more readily compatible with IBM Lotus messaging and calendaring tools.