First Coffee for July 19, 2005

David Sims : First Coffee
David Sims
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First Coffee for July 19, 2005

By David Sims

The news as of the first coffee this morning, and the music is Dave Brubeck’s Time Out. Just never gets old, does it?

First CoffeeSM welcomes Bruce Cleveland this morning. Cleveland is Siebel’s new senior vice president of products, but he’s still running, as before, the company’s OnDemand hosted CRM product and the small and medium business division.

Cleveland graciously took the time to answer some questions First CoffeeSM had. Excerpts appear below, the entire Q&A will be in an article by First CoffeeSM’s mild-mannered reporter alter ego on the TMC site later today:

FC: Congratulations on your promotion at Siebel. Do you get a nicer office now, too?

BC: I’m in the same office, but I’m seeing even less of it than before!

FC: Your new position puts you in charge of products, as well as the on-demand business. What do you see as your top challenges in that position?

BC: Marshalling our resources quickly and effectively to gain the biggest wins the fastest is a critical challenge. Similarly, rapidly assessing areas for disinvestment is critical. [And] with our soon-to-be-introduced custom build CRM solutions, we are moving into an exciting new market.

Continuing to separate fact from fiction as it relates to our actual market and product leadership will be an ongoing challenge. Everyone likes to pick on the leader.

FC: The company that comes out on top in the on-demand CRM space will have done “what” that their rivals failed to do?

BC: Delivered business impact. Customers are beginning to recognize that on-demand is a deployment option and nothing more. It’s not a panacea to CRM success. For a prime example of this, look at the recent report by JMP Securities highlighting’s failed implementation at Cisco.

FC: If you could wave a magic wand over Siebel right now, what’s the one thing you would change, company-wide?

BC: I think we’ve made our lives a bit too complex and unwieldy, which is understandable for any organization that grew as fast as we did. Our CEO, George Shaheen, has stated that simplifying our operations is one of his key priorities, and I agree.

FC: What’s the most interesting or important book you’ve read in the past year?

BC: Return on Customer: Creating Maximum Value From Your Scarcest Resource, by Don Peppers and Martha Rogers.

FC: You and I have spoken about the rivalry between and Siebel, which reminds me of a great sports rivalry, where one keeps forcing the other to get better. Naturally there’s emotion involved as well, and you mentioned some “creative things” Siebel could do in response to some of’s stunts. Any ideas?

BC: I’d prefer to surprise you, along with everyone else. But to be quite honest, we haven’t had to resort to anything trickier than delivering a solid product.

We are completely focused on sales, marketing and service success – not gimmicks. Our goal is to deliver honest value, not hype. We have taken the processes and templates used by some of the world’s most successful companies and built them into an affordable solution that anyone can use.

FC: What’s the next great innovation in the on-demand CRM space? Are you looking for it in pricing models, delivery or content?

BC: It could be all of the above. The most important take-away is that on-demand CRM is simply a deployment option. I don’t mean that critically. We take the on-demand market very seriously.

But overall, it’s like the old Maslow quote, “If the only tool you have is a hammer, you will see every problem as a nail.” We are unique in providing organizations with every conceivable build and buy deployment option – not just hosted CRM.

A tip of the coffee pot to Ruth Habbe, just named Demandware, Inc.’s vice president of marketing, where she’ll concentrate on “building upon the company’s momentum in helping multi-channel retailers,” according to company officials.

Prior to Demandware, Habbe served as President at MediaMap, Inc., an application service provider delivering a CRM Communications Management application.

New research by independent market analysts Datamonitor and outsourcing advisory firm Everest Group this morning has found that the average size of IT and BPO services contracts almost halved in the second quarter of 2005.

Based on figures from Datamonitor’s “IT Services Contracts Tracker,” the average size of contracts announced by IT and BPO services vendors in the second quarter of 2005 fell to $56 million compared to $106 million in the year ago period, according to company officials. “This means that average deal size has now declined for four consecutive quarters,” Datamonitor concludes.

Datamonitor’s “IT Services Contract Tracker” tracks every new outsourcing, systems integration and consulting deal with a value greater than $1 million signed by major IT services vendors, and has tracked over 7,500 contracts during the last five years.

Datamonitor tracked a total of 447 deals during the second quarter of 2005, which represented a 7.5% rise over the 416 contracts logged during the year-ago period. However the value of deals fell by 43% from $44.1 billion to $25 billion.

Company officials say the decline in average deal size was “largely due to a fall in the number of mega-deals signed during the quarter.” Datamonitor tracked three deals with a value greater than $1 billion – two for IBM and one for BT Group, compared to six in the second quarter of 2004. The number of deals with a value greater than $100 million also fell to 49 from 70 over the same period.

NetSuite, Inc. is announcing this morning that Santa Clara-based Helio Solutions, “Sun Microsystems’ largest West Coast technology integrator,” according to NetSuite’s press release, has ripped out accounting software from Peachtree and a proprietary CRM package in favor of NetSuite.

Helio has 60 employees, hitting NetSuite’s sweet spot of the small and medium-sized market. Still, they’re in the top half of the VARBusiness 500 list of the industry’s largest value-added resellers, with revenue of $88 million.

First CoffeeSM was in Ankara yesterday, a city with all the charm of a military airport cargo terminal, getting passports renewed and was a bit out of the loop. Catching up, it appears yesterday Tom Sanders wrote about IBM’s new set of tools “that allows enterprises to use blogs for collaboration, bringing enterprise class management tools to the world of online diaries.”

Corporate blogging. That’s one of those things that just sounds wrong, like “government journalist,” “The Anarchy Institute” or “Islamic rock’n’roll.”

“Blogging applications have so far catered to individuals who make postings without any support or management from a larger entity,” Sanders writes, doing a fine job summing up everything worthwhile and interesting about blogs in one sentence.

Monkey around with that and you’ll end up with something about as interesting as an “underground student newspaper” edited by the Dean of Students. Oh you’ll have a vehicle for integrating into your organizational communicational flow chart but it’ll have as much to do with “blogging” as N’Sync does with “punk rock.”

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