In true bullish form, Siebel Systems Inc CEO Tom Siebel said yesterday the recent acquisitions of its main rivals, Vantive Corp and Clarify Inc signaled their elimination from the customer relationship management space. Speaking during the company’s third quarter earnings conference call, the CEO said the acquisitions, by PeopleSoft Inc and Nortel Networks Corp respectively, created an enormous opportunity for Siebel. It was really breathtaking for us to see the remaining viable players get eliminated in the market, which is what it looks like to us, he said. Now it’s incumbent upon us to do our job, we know what our job is and we will do everything we can to expand our market share.
The CEO said he thought the Vantive acquisition would be a very challenging experience for both companies going forward. They both have a lot of change and instability in their senior management ranks, he said. I would be amazed to see Vantive be a factor in the market for the next couple of quarters.
On Nortel’s purchase of Clarify, he said the acquisition made a lot of sense from Nortel’s perspective but added that the move would effectively make Clarify disappear from the market. Although Clarify is known best for its call center software, the CEO said Siebel was still the biggest player in that space, and to my knowledge we don’t have a single installation on Nortel’s platform anywhere in the world.
In another strong quarter for the San Mateo, California-based front office vendor, Siebel reported net income of $30.1m, or $0.27 a share, beating analysts’ consensus polled by First Call by two cents on revenue up 87% at $195m. Revenues from license sales, at $126m, increased 63% from the previous year and accounted for 64% of total sales, the rest ($69m) coming from professional services and consulting. Revenues for the nine months ended September 30 were up 84% at $494m. Net income was $77.2m.
Siebel said the company’s third quarter license sales makes Siebel the second largest enterprise software vendor behind SAP AG. He continued to dismiss competition from Oracle Corp, an upcoming player in the front office market, and said that the company still saw Vantive as its closest competitor in that time period. Siebel said that 39% of its business during the third quarter was uncontested. It faced Vantive in 12% of prospective new accounts and Clarify in 10%. Beneath that, the rest are completely fractionalized, said the CEO, adding that no other vendor was in more than 5% of competing business.
Regarding the Oracle phenomenon, Siebel said, the net effect is that it’s doing us a great service. All this local screeching that Oracle’s going in for is getting us more newsworthiness and advertising time than we could possibly pay for ourselves. He added that beyond the emotionally charged rhetoric the fact of the matter was that Oracle remained a non-player in the CRM market.
The CEO highlighted the company’s agreements with IBM, Lucent Technologies and Dunn and Bradstreet as contributory factors to its success in the third quarter. He also drew attention a recent independent survey that he said showed that customer satisfaction levels were higher than ever before. He said that of those users questioned, 21% said using Siebel applications improved employee productivity while 15% said they led to increased revenues. On average, all those polled said they achieved return on their Siebel investments within 10 months.
Overall, he said Siebel was seeing increased demand for its products across the board. He added that he has never been more encouraged entering the next quarter, and the next millennium, about Siebel’s future since starting the company.
