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Siebel Launches 7th OnDemand Installment
By Jim Wagner

March 29, 2005

Officials at CRM leader Siebel Systems (Quote, Chart) said their commitment to hosted software remains priority one, as shown with the Tuesday launch of CRM OnDemand 7.

While the new release features a unified communications desktop and new analytics tools, the San Mateo, Calif., company showcased the functionality of its new Contact OnDemand Module, which is built into version 7 and is the first of its kind in the industry to marry hosted telephony and CRM.

The functionality comes courtesy of its $5 million acquisition of hosted telephony provider Ineto Services in January 2004.

Bruce Cleveland, Siebel senior vice president and OnDemand/SMB general manager, said in a press conference Tuesday the release is the seventh in little more than a year. That fact, he said, should answer some of the questions and doubts posed by the press over Siebel’s commitment to hosted software.

“There’s been some questions of, ‘Is Siebel in this business? Are we really in the OnDemand industry?’ I want to assure you that the amount of resources that we’ve been investing in this particular area across our CRM OnDemand and Contact OnDemand are significant,” said Cleveland.

Despite a rocky start with, Siebel’s foray into hosted CRM in 1999, the company gave it another try by teaming up with IBM in October 2003 (Quote, Chart) to provide Siebel OnDemand, as well as buying hosted CRM provider UpShot for roughly $70 million and Motiva for $3 million later that month.

Since that time, Siebel has released OnDemand updates at a fast clip, beefing up its partner program and expanding into industry niches.

While Siebel holds a commanding market share lead in CRM software, has a commanding lead in hosted CRM. In a recent interview with Reuters, Cleveland stated the company will catch up to in two years if Siebel continues its growth rate of 30 percent quarter-over-quarter.

OnDemand 7 features some core platform improvements, notably in its unified communications desktop, which tracks and drives communications made throughout the sales, marketing and Web channels. The new version also assists its customers by routing communications based on agent skill, availability and customer need.

But the real benefit is with the Contact OnDemand module, which integrates the hosted telephony services once provided by Ineto with Siebel’s CRM hosted offering.

Among the benefits derived from integrated PBX , automatic call distribution (ACD) and VoIP support, the hosted offering also allows for control over outsourced call center functions and the need to customize third-party software.

“It gives them another weapon in their arsenal for on-demand [CRM],” said Joe Galvin, an analyst at Gartner Research. “By complementing their sales application with the contact application, they can now reach a broader segment of the audience and meet those who want contact center functionality, sales functionality or both.”

Cleveland said the functionality integrated into Contact OnDemand requires third-party add-ons for customers of its archrival Mike Betzer, Seibel vice president of Contact OnDemand and former founder and CEO of Ineto, said the costs associated with integrating all these services into a CRM product would run $1 million and six months worth of integration time to launch.

“Every time you add another component to this stack, it becomes more and more difficult,” he said. “What we have found is that customers are tired of buying multiple-point solutions and trying to integrate them together. The word integration is used too easily, too frequently and is much harder than people are making it sound.”

A bundled CRM and Contact OnDemand offering will cost customers $150 per month, per user. A standalone version of Contact OnDemand is available for $100 per month, per user, and can be integrated into existing software or hosted CRM application.

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