Siebel Systems and IBM are developing a CRM hosting service pushing forward an effort Siebel abandoned two years ago. According to sources familiar with the project, the companies intend to market a service in which Siebel‘s business applications will be hosted by IBM Global Services, Bigblues consulting unit. The companies may announce the new service within the next several weeks, the sources said, although the plans could change.
Like similar services from Salesforce.com and Upshot, the partnership between Siebel and IBM will offer a slimmed-down version of Siebel’s CRM applications delivered over the web for a recurring fee, the sources said.
Application hosting services promise to remove the hassle and start-up costs of purchasing such software by handling installation, maintenance, support and updates. The companies offering such services, application service providers (ASPs), run and maintain the software on their own equipment at their own facilities, meaning the business customers can reduce their infrastructure costs as well.
Siebel launched a similar service, called Sales.com, in 1999. After spinning the unprofitable unit out as a separate company, Siebel later folded it back into the company and eventually shut it down in 2001. At the time, the San Mateo, Calif.-based company said it closed Sales.com, which was aimed at small businesses, to focus on larger customers instead.
According to Sheryl Kingstone, an analyst at The Yankee Group, Siebel is smart to team up with a big partner like IBM in its second stab at the ASP market, because Big Blue can lend valuable marketing, service and technical support to the effort. However, Siebel faces some technical obstacles if it is to succeed, she said.
“They have to rewrite their applications so that they can be delivered more simplistically,” Kingstone said. “Siebel is a very functionally rich application, but what companies liked in Salesforce.com and Upshot is that they are user-friendly.”