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October 28, 1999

IBM Extends Siebel Deal to E-Biz App Integration

By CBR Staff Writer

By William Fellows

IBM Corp and CRM giant Siebel Systems Inc have extended their existing agreement to cover out-of-box integration with IBM’s e- business software plus co-marketing, co-selling and joint development. IBM will quickly become Siebel’s most important revenue stream now that 4,700 IBM sales people in addition to Siebel’s 250 field sales staff will be peddling the 119 CRM products Siebel offers. But chairman and CEO Tom Siebel backed away from characterizing his company as an IBM shop. The deal is not exclusive and except in certain circumstances the two will not actually resell each other’s products.

The deal marks the end of IBM’s own CRM initiative. Last year it turned its Software Artistry products picked up with Tivoli Systems together with other acquired CTO software in a division called CorePoint. That division has gone and products have been canned, with the exception of the CTI work. IBM’s Bill Etherington, SVP and group executive of sales and distribution told ComputerWire it quickly became clear that it was beyond our capability to turn [CorePoint] into a Siebel.

First fruits of the development agreement will be seen in the March release of Siebel 2000 which will include integrated support for IBM MQSeries messaging, WebSphere web application servers and support for DB2 on S/390. Integration with IBM’s application framework, net.commerce and computer telephony integration products will follow.

Integration with IBM’s business intelligence software is not part of the new deal but it’s likely to follow as closing the loop on ERP, CRM supply chain and analytics is now a key driver in the development of the enterprise software market. Etherington warned that tying CRM to analytics through a CrossWorlds-type enterprise application integration or XML is not there yet, but said IBM is looking at it. Where a customer requires an analytics product we will sell them IBM says Etherington.

The co-selling compensation model they will both use says that each salesperson records a win whoever actually inks the agreement. They will focus on finance, insurance, communications and consumer packaged goods markets but will not limit themselves to these.

The companies’ current agreement extends to integration on DB2 and consulting and services which IBM sells to Siebel customers; implementation and integration are said to soak up 75% of the cost of any CRM engagement. Siebel says its software isn’t being optimized to perform better on IBM kit although in reality it does anyway.

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Siebel says it is already embracing the ASP model with its US Internetworking, ICL and Corio deals and is happy enough for IBM to push its CRM software through its newly-created ASP programs. IBM won’t be using CRM internally, even in its CRM division, it has written its own CRM package for that job.

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