Siebel Systems’ recruitment of Mike Lawrie, a 26 year veteran of IBM, is being seen as an attempt to reinvigorate the CRM giant after a turbulent couple of years.

However, observers have questioned whether the notoriously dictatorial Siebel, who will retain the chairmanship at the company, will be able to take a back seat from the day-to-day running of the company.

Siebel, like most IT companies, has suffered in recent years as IT spending evaporated, reporting a loss for 2002 and 2003, while revenues dropped from $2bn plus in 2001 to $1.4bn last year.

The company has been hurt by a customer backlash against software systems that are perceived as overpriced and delivering less value than promised. More recently, customers have been tempted by hosted CRM offerings, which do not require major upfront investments.

On a conference call with analysts yesterday, Siebel said he had made the decision to separate the chairman and CEO roles a year ago. He said Lawrie, most recently IBM’s senior vice president and group executive, sales and distribution, and who has also served as head of two different IBM software units, had been his first choice for the job.

Siebel said he would continue to be involved in strategic relationships with customers and partners, but was at pains to emphasize that Lawrie would be running the company on a day- to-day basis. As CEO, his job is to manage the company.

For his part, Lawrie insisted that he did not plan drastic changes at Siebel. The intention is to stay with the team and the strategy and the game plan.

At the same time he acknowledged that when customers examine software vendors now, the bar has been raised. He said software vendors had to deliver more value, more expertise, and more return on investment.

One key task for Lawrie will be kick-starting Siebel’s sales, and Lawrie yesterday gave some pointers to how he intends to do this. While emphasizing Siebel’s achievements in creating the CRM market, he said this market was still largely untapped. Lawrie also emphasized the opportunities for the company’s broader product set, including analytics and ERM, and cited opportunities for more global business, and further penetration of key vertical markets.

However, Lawrie faces a formidable challenge, both in terms of Siebel’s structure and in the shape of Tom Siebel himself, said Steve Garnett, senior vice president for EMEA at online CRM vendor Salesforce.com, and former EMEA general manager at Siebel.

He’s going to have to really shake that company up, said Garnett. Part of the problem, he said, is that as Siebel ramps up its own hosted offering it has to balance that against its historic model of hefty upfront license fees. If the balance changes too quickly, Wall Street and shareholders will not be happy.

At the same time, said Garnett, Lawrie will have to deal with the formidable presence of Siebel himself. Tom is a dictator in that company, said Garnett. He added that there has been a steady stream of senior execs who have joined Siebel only to leave rapidly.

At the same time, Garnett discounted the suggestion that Siebel had been forced into the move. I don’t think the board drives Tom Siebel. Siebel clearly recognized he needed to get some fresh thinking into the company in a bid to turn it around, said Garnett.

This article is based on material originally published by ComputerWire