Siebel gets new CEO from IBM

Spencer Swartz

SAN FRANCISCO: Siebel Systems Inc. has named former IBM executive Michael Lawrie as chief executive, replacing Thomas Siebel, who remains chairman of the software company he founded just over a decade ago.

The move comes as the No.1 vendor of programs for managing customer service, sales and marketing is under attack from soon-to-be-public upstart Salesforce.com, which sells an inexpensive alternative to Siebel's expensive and complex products and has stolen customers from its bigger rival.

"This stems from a decision I made about a year ago to separate the roles of chairman and chief executive," Siebel said in a conference call with analysts.

Siebel, 51, also said he has "no intention" of pursuing any job opportunities outside of Siebel Systems.

In recent years, Siebel has been under fire for its pay practices. Last summer, it settled a derivative suit brought against its board by the Teachers' Retirement System of Louisiana, a shareholder, which had accused company directors of violating Siebel Systems' own rules when it granted stock options to directors and executives, including Siebel.

After posting years of explosive growth, Siebel Systems' fortunes turned with the economic slowdown as big customers trimmed their budgets and looked to simplify software systems.

The software maker recently posted a sharply higher quarterly profit on continued cost-cutting efforts that have shed 2,000 employees and shuttered numerous offices amid two years of falling sales.

VETERAN IBM EXECUTIVE

Lawrie, 50, will take the helm at Siebel Systems on Tuesday. His departure from IBM, where he was head of sales, spurred an executive reshuffling at the world's largest computing company, which is a key partner of Siebel Systems.

Lawrie, an IBM veteran of 26 years, told analysts in a conference call he had no plans to make any major changes in the company's structure but also declined to comment on what longer-term changes he might make.

Trip Chowdry, an analyst at FTN Midwest Research, called the management change a mixed bag. "It does not come as a surprise to me. I think it was time for Tom Siebel to focus on the long-term thinking," Chowdry said.

Salesforce.com "is a company that's breaking Siebel's business model right at its core. (Tom) Siebel has failed to respond directly to the threat from Salesforce. He has to again start thinking strategically and move away from day-to-day operations," he said.

Chowdry said he would rather have seen Siebel's new chief come from the ranks of a big customer that is familiar with customer concerns.

"I'm not too happy by an IBM person heading Siebel because IBM's business model is based on solving complexity with complexity because they make money on services," Chowdry said.

©Reuters