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Siebel targets Web-based SW for growth

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CIOL Bureau
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Wei Gu

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NEW YORK: Siebel Systems Inc. has targeted Web-based software and small business to spur growth amid sluggish demand for its enterprise software that handles customer information.

Salesforce.com and RightNow Technologies have carved out profitable niches in a tough selling market by persuading customers to pay a modest monthly fee to access software rather than paying millions of dollars upfront.

Siebel last year, rolled out a subscription product to challenge Salesforce, two years after it shut down an earlier unsuccessful attempt. The company recently developed a dedicated sales team for the Web-based products.

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"We said that the market is yours, now we are here to compete," said Bruce Cleveland, senior vice president of OnDemand and small business, who recently returned to Siebel after taking two years off sailing around the world.

"Netscape proved there was a market for browsers," he added. "But the first entrant is not necessarily the one to win."

Siebel is making big investments in the fast-growing Web-based and small business market while cutting back in some other areas. Business intelligence is another targeted area, the company's Chief Financial Officer Ken Goldman said.

The company is betting that it could see growth again by focusing on these new areas.

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"We have been focusing for a while on cost reduction and I think we need to refocus on growth," Goldman said at a Goldman Sachs software conference on Tuesday, acknowledging that the company's overall performance this year has been below its plans.

Siebel's Cleveland declined to comment on two other executives' statements earlier this year that Siebel would unseat Salesforce in the Web-based software market.

Siebel said contract value for its Web-based products during the third quarter rose 32 percent over the second quarter but would not give the absolute numbers.

Salesforce, which is scheduled to report its third-quarter results on Nov. 17, said second-quarter deferred revenue rose 18 percent to $61.6 million from the first quarter. Revenue rose about 16 percent to $40.1 million during the same period.

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