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Siebel's Cleveland Says Benioff is 'Running Scared' as Big Companies Enter On-Demand CRM

September 16, 2005

In a memo yesterday afternoon, Bruce Cleveland, senior vice president for products at Siebel Systems, took a shot at Salesforce.com's Marc Benioff. Cleveland said that Benioff is "running scared" as he sees big companies entering the hosted CRM space.

Cleveland refers to a memo issued by Benioff earlier this week commenting on Siebel's pending acquisition by Oracle, announced Monday, Sept. 12, 2005. In that memo, Benioff said that as a result of the acquisition, "the same thing that happened to PeopleSoft will happen to Siebel, it will die."

Cleveland attacks one of Benioff's key arguments, around issues of technology platforms. Benioff had said that "Siebel OnDemand is written exclusively on DB2 and Websphere and runs in IBM data centers," and so Oracle would be unlikely to continue supporting it.

But Cleveland responds, "Now, given our close partnership with IBM, we have chosen to run Siebel CRM OnDemand on DB2 and on WebSphere, and to use IBM's world-class hosting services. But there is no technical linkage that precludes us from working with other companies."

Cleveland also quotes assurances from Larry Ellison Sept. 12 at Oracle's press conference announcing the planned Siebel acquisition:

"We think OnDemand is going to be increasingly important. We think the Siebel OnDemand products have -- are improving at a very, very rapid rate and we intend to invest in them heavily. In fact, we expect that all of the Siebel product features and functions that they have in the software products will migrate to the OnDemand products. So we think that is again a very important asset that we want to preserve and invest in as the acquisition is concluded."

Cleveland also responds to Benioff's mantra, "It's the end of software," calling it an "inane statement" to say that the practice of software development is coming to an end. He cites Siebel's continued growth in the CRM space as evidence that the company is far from dying. "Marc is not in the same league as Siebel Systems in terms of the breadth of solutions we provide for leading organizations worldwide," he says.

Cleveland says what's really going on is that Benioff is scared, "and when he runs scared he attacks." Scared, that is, of growing competition from Microsoft, SAP and Oracle, as well as "increasingly hungry and aggressive competition from smaller companies."

For further insight into the Oracle-Siebel acquisition, Salesforce.com's strategy, and the long-time Siebel-Salesforce acrimony, here are some recent articles on TMCnet:

Oracle Buys Siebel -- Rich Tehrani acknowledges that this makes sense as a business deal but believes "it is not a good deal for the customer."

Analysis: Will Siebel Customers Benefit? -- Bob Liu finds that the Oracle-Siebel acquisition "does remove the cloud surrounding Siebel's long-term viability and leadership," but it also raises questions in other areas.

The Enterprise Software Industry's Alamo: Remember PeopleSoft -- Tracey Schelmetic points out that so far Oracle's PeopleSoft acquisition doesn't seem to be going so well, according to some observers.

First Coffee Talks With Salesforce Pres. Jim Steele at Dreamforce '05 -- David Sims gets some interesting insight into Salesforce.com's strategy and the history of the Siebel-Salesforce rivalry.

AB -- 9/16/05




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