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Siebel puts resources behind SMB announcement

Last week Siebel announced a significant investment in its sales operation dedicated to the small and medium business market. But does the CRM giant have what it takes to make a dent in this market?

Three years ago Harris Interactive Inc., a market research company, ripped out its in-house CRM system from Siebel Systems Inc. because it found the system hard to use and expensive to manage. Instead, it signed up with

Now Siebel has retooled its effort, hoping to win back customers such as Harris Interactive and compete head on with on-demand CRM pioneer, as well as Best Software, Maximizer Software Inc. and the dozen or so other vendors that have already made inroads into this market.

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Last week San Mateo, Calif.-based Siebel announced the establishment of regional marketing efforts, a series of channel partnerships and team-selling initiatives. The company also added 70 salespeople who will specifically target the small and medium-sized business (SMB) market.

The announcement is the culmination of years of work toward the SMB market, said Bruce Cleveland, Siebel's senior vice president for SMB and OnDemand. The company has revamped its SMB products, hoping to make deployment simpler and user interfaces easier to navigate.

Since last year Siebel has been offering a Web-based version of its software -- a pricing model similar to the one used by -- that customers pay for as they use.

"We have spent this year building our product," Cleveland said. " has been able to run unopposed for five or six years, but we have paced ourselves like Microsoft, when it saw the launch of Netscape. We have been watching and we are moving into the market when the timing is right."

Lessons learned

Though Siebel is best known for its enterprise products, it has learned from its mistakes in the SMB space, said Sheryl Kingstone, CRM program manager with Boston-based research firm Yankee Group.

Like many enterprise vendors that target the SMB market, Siebel began with a stripped-down version of its enterprise product that was ultimately too complex and cumbersome for resource-challenged SMBs, Kingstone said. But Siebel has since done the work of developing a product that is appropriate for SMBs, she added.

Siebel now has a hosted service and has simplified its user interface for both its on-premise and hosted service, said Denis Pombriant, managing principal with the Stoughton, Mass.-based Beagle Research Group. In addition, the company has been working with Microsoft to better integrate its applications with Microsoft applications such as Outlook.

The company's latest announcement focused on sales and marketing, addresses its weak spots in the SMB market. "The company just never put a go-to-market strategy around the product," Kingstone said.

Cleveland said Siebel is now winning more customers in situations where it is up against than it had in the past, and he expects that to improve over the course of next year.

Homework for Siebel

But Siebel has some work to do, particularly if it hopes to pull customers away from, Pombriant said. customers can be almost cultish in their devotion to the product. " does a great job of instilling the 'we belong' message," Pombriant said.

One believer is Dan Chiazza, senior manager of global sales and database operations at Harris Interactive. has worked hard to earn Chiazza's loyalty. He has been to numerous user events at exclusive New York restaurants and night clubs. Top executives have fielded feedback and even put one of the Harris Interactive's suggestions into an upcoming release. And Chiazza said he simply likes the product and finds it effective.

"The bar is set high for anyone that wants to steal our business," Chiazza said.

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