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October 27, 1999

IBM, Siebel to Tie CRM Pact Today

By CBR Staff Writer

By Siobhan Kennedy

IBM Corp and Siebel Systems Inc will team up today to announce a CRM pact that will most likely see IBM co-market and distribute the front office vendor’s line of customer relationship management software on its server platforms. Although both sides were tight-lipped about today’s news, a spokesperson for IBM told ComputerWire that the company’s senior VP of sales and distribution, Bill Etherington, will make the announcement in New York City, alongside Tom Siebel, president and CEO of the front office vendor. A Siebel spokesperson billed the news as extremely significant for the company.

Although details are thin on the ground, a reselling partnership with IBM would make perfect sense for both companies. Although Siebel is acknowledged as the number one CRM vendor, its position is being increasingly being encroached upon by other suppliers, notably Oracle Corp, so clinching a deal with IBM, with its vast user base, would certainly aid Siebel in maintaining its top spot. The deal would also be an important come-back for Siebel which lost out on a global deal with Hewlett-Packard last month when the vendor selected Oracle to be its CRM partner. Siebel already has alliances with Compaq, Sun, Sequent, Siemens Computer Systems and Panasonic, and others, as well as a new partnership with Unisys, announced yesterday (see separate story).

For IBM, getting Siebel on board is an important link in its plan to be able to offer customers the leading ERP, supply chain, CRM and business intelligence applications. Earlier this year, the company combined its ERP and supply chain divisions and set up a separate CRM unit to focus on the market. Back in August, Big Blue made its first move in the supply chain space, forming a global strategic alliance with the biggest player, i2, to co- market and jointly implement its software on IBM’s RS/6000, AS/400 and Netfinity platforms. At the time a spokesperson for IBM told ComputerWire that it would make similar deals with leading CRM vendors and mentioned Siebel as one possible partner. With both the other leading standalone vendors, Vantive and Clarify, now off the scene, Siebel is the obvious choice. Although IBM has a CRM suite of its own from its Corepoint unit, the spokesperson said that IBM does not intend to push the software as its preferred front office offering. It will instead look to partner with leading suppliers who could then choose to bundle bits of the Corepoint suite alongside their own applications if they wish.

What’s not clear is whether or not Siebel will agree to use IBM’s hardware systems internally or whether IBM will standardize on Siebel’s CRM offering for its own front office software. Under the deal Oracle signed with HP, Oracle agreed to switch half its development environment to the HP platform as well as move key internal systems to HP. In return, HP said it would use Oracle’s front office application suite as the core of its CRM strategy. Certainly, IBM will look to Siebel to position its products within IBM’s e-business application framework – its set of key middleware offerings including MQSeries, Websphere application server, Tivoli TME network management software and Lotus Domino. IBM makes the majority of its profits from software sales so getting customers locked into its framework ties them to IBM for upgrades and ongoing support. When it signed the deal with i2, Michael Flood, marketing executive of ERP and SCM, said IBM wants to sign similar deals with other supply chain and CRM vendors. We want to get the vendors using our application framework for e-business, he said. We’ll use i2 as the template to signing deals with the rest of the top solution providers.

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