Peoplesoft takes on Siebel, Oracle in hot market

Lisa Baertlein

PLEASANTON: Craig Conway, president and chief executive of e-business

software vendor PeopleSoft Inc., is on the warpath, and he is not alone. Conway

and rival software-makers, SAP AG and Oracle Corp. are launching full-scale

attacks on sales and customer service software giant Siebel Systems Inc., which

owns the coveted customer relationship management (CRM) segment that is

estimated to log sales of $14.4 billion this year and $24 billion by 2003.

CRM software promises to help make sales and marketing more efficient by

automating sales force and call center activities and providing valuable data

that users can apply to marketing campaigns and internal financial analysis.

"This industry is a book where every chapter ends with the leader being

taken out," said Conway, who is challenging Siebel with a new Web-based CRM

offering PeopleSoft is unveiling June 4 in Las Vegas.

Battlefield Net



PeopleSoft is the sole firm in its realm to sell software that automates and
integrates a user's human resources, financial and other business processes on

the Internet. This means that none of its software is housed on personal

computers so there's no need to install software or invest in lots of expensive

hardware.

The Pleasanton, California firm bought Vantive Corp., one of the top three

CRM vendors at the end of 1999, and had been criticized for not rolling out its

Web-based version of the software sooner. "The bottom line is that

PeopleSoft made the right decision - albeit they made it late - to retool

Vantive," said Meta Group analyst Steve Bonadio, who added that the company

did a "pretty darn good job" on it's Web-based CRM product.

While the company's first all-Internet CRM release won't have all the bells

and whistles of Vantive or Siebel products, analysts said the software's ability

to pull and analyze data from a user's inventory, payroll and sales systems

could give it a leg up against competing products. "If they really manage

to get it working, that's going to kill Siebel and Oracle because they're still

trying to get it working," said Esteban Kolsky, a Gartner senior research

analyst.

However, the No. 2 software maker Oracle, though, sees things differently.

"I think the rest of the market is playing catch-up with Oracle," said

Lisa Arthur, that company's vice president of CRM marketing.

Real battle is for No.2 spot



While Oracle, PeopleSoft and German software titan, SAP each hope to steal
Siebel's No. 1 spot analysts say the real battle is for second place. They said

Oracle - a formidable marketing machine - hasn't been in CRM as long as

PeopleSoft and that its products still have performance issues.

"Oracle's ahead on mindshare and now PeopleSoft is ahead on product.

They're both going to be scrambling to make up for what they don't have,"

said Erin Kinikin, a vice president at Giga Information Group. SAP partners with

CRM vendors and is lagging because it does not have its own solution, analysts

added.

Siebel has promised to launch its Internet-based product, called Siebel 2001,

this summer. Firm officials were unavailable for comment for this report.

"Our solar system in the (information technology) world rotates around who

has the best technology," said Conway, who says his company already is the

No. 2 player and poised to gain market-share when PeopleSoft 8 CRM ships on June

29.

Changing landscape



Analysts agreed that economic factors would have an impact this year by
knocking out a number of smaller CRM companies. "Users are being more risk

averse now. They are gravitating to the vendors they know are going to be around

for a while, Meta Group analyst Bonadio said.

Other companies likely will merge or be acquired. Among the companies on the

block is Clarify, which was a force in CRM before its acquisition by Nortel

Networks in 2000, analysts said. A Nortel spokeswoman declined comment. All in

all, the analysts said, 2001 is shaping up to be a different sort of year for

Siebel. A year ago, the San Mateo, California-based CRM vendor pretty much had a

take-it-or-leave-it pricing policy.

As competition heats up and tech spending remains cool, Bonadio said

customers are reporting that Siebel is discounting prices by 40 to 70 per cent.

Conway said PeopleSoft already is exerting pressure and grabbing customers away

from Siebel. "There are three deals we're going to announce June 4 that are

each over $10 million - Siebel deals that got stopped and signed with us,"

Conway said.

Despite the trends, however, analysts agreed that one thing is certain to

remain the same. "The question this year is 'Does Siebel pass the torch on

to someone else?' The answer is clearly no." Bonadio said.

(C) Reuters Limited 2001.