Wednesday, April 13, 2005

Management shakeup at Siebel

Siebel CEO Michael Lawrie agreed to resign yesterday, less than one year after taking over the top spot from founder Tom Siebel. Siebel's board was clearly unhappy with the Siebel's latest quarterly result, and held Lawrie accountable.

The Board also announced that board member George Shaheen will take over as CEO. Shaheen is former CEO of Webvan, roadkill of the dot-com bust. He was also the former head of Andersen Consulting (now, Accenture).

Analysts are surprised by the move, and generally give Lawrie good marks in his handling of the situation at Siebel, which is having a rough time making the transition from multi-million CRM deals to a market that favors the pay-as-you-go approach of on-demand vendors, such as Siebel has launched its own on-demand service, based on its 2003 acquisition of Upshot.

There's more in the Siebel press release.

Update. Josh Greenbaum points out that Siebel's woes are strategic:
The customer record is now such an essential part of managing the supply chain, the logistics chain, after-market sales and service, strategic procurement and business forecasting that integration to the rest of the enterprise is no longer just a good idea. And this integration can be enormously costly when the enterprise is trying to link a standalone CRM product like Siebel to a broad-based set of back and front-office systems.

It's so much easier and logical for customers to try to hook their big suites -- like SAP and Oracle -- to these respective vendors' CRM offering than take on the complexity challenge that Siebel offers. Especially as most existing Siebel customers also are SAP and Oracle customers.

And don't forget the challenge at the low-end.
If you are a company running a major ERP suite, do you buy Siebel and try to integrate it, or do you just go with your ERP vendor? And if you really are looking for a CRM point solution, why not just go with an on-demand vendor, such as Granted, Siebel has its own on-demand offering, but in that market it gives up its leadership position.

Update. According to CNET, one group of Siebel shareholders met yesterday, demanding that Siebel to do more than simply replace the CEO. They are demanding that Siebel use its $2.2B to work to buy back shares and to position the company for a merger or to be acquired.
"There was a feeling that this was a vote for the status quo from an entrenched management," [Providence Capital President, Herb] Denton said. "If Lawrie, given his credentials, couldn't cut the ice, there are questions over whether Mr. Shaheen could."
If so, Siebel's problems aren't over.

Related posts
Software on demand: attacking the cost structure of business systems
Siebel loses $59M and responds by going on a shopping spree

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