Ironically, the only people who seem to love Siebel are his customers -- of course, you have to take Tom's word on that. At every quarterly call, Tom claims his customer satisfaction ratings are in the stratosphere. Last fall he claimed a 96% approval rating from his customers (identical, incidentally, to his self-reported satisfaction rating from his employees). This winter customer satisfaction was at 95% and this spring it was "the highest it has ever been in the company's history."
Customers love him, employees love him, everyone else hates him. So what's the problem? The problem is that, absent the full disclosure and transparency that is more and more necessary in this post dot-bomb, post-Enron era, it's getting harder to believe what Siebel says. This company is, without a doubt, the most closed-off, inaccessible, information-hostile public company in the software industry. Siebel sets the standard for non-disclosure and non-access.
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And herein lies the real issue. When there is no way to independently verify the things we do know that beggar belief -- such as universal customer satisfaction -- we have to worry about the things we don't know as well.
Enron aside (whose executives made no bones about their hostility to outside scrutiny), the software industry has a lot of experience with the effects of non-disclosure and non-transparency. The meltdown of Baan prior to its fire sale acquisition by Invensys was a classic case. While CEO Tom Tinsley held off the press and analyst community with his disdain, the Baan brothers played fast and loose with the books, the stock, and just about everything else in the company.
This methodology was repeated by Messrs. Lernhout and Hauspie as they took their eponymous speech synthesis/voice recognition company from market leadership to receivership.
It doesn't have to get that bad, but even a company like Computer Associates can get burned by non-transparency. A sudden shift in CA's accounting methods, which effectively confused and baffled anyone who tried to track the company, led to an ugly, public proxy battle and the loss of a lot of good-will in the marketplace.
Then there was Ariba, making claims to financial analysts about the extent of its network and market opportunity that were beyond belief. Did I mention CommerceOne? How about the rest of the dot-bomb gang? It's pretty obvious that the more closed off a company, and the more outlandish its claims, the greater the risk for catastrophic failure.
Oracle's Dose Of Reality
Does this mean Siebel is next on my list of miscreant software companies? There's only one way to tell, and that is to get a real, objective inside view of what's happening at Siebel. That means more openness, more independent scrutiny, more access. Sure, it's painful, but sometimes that pain is good for everyone.
Take the study published last January by Morgan Stanley regarding Oracle's applications users. Done in conjunction the independent Oracle Applications User Group (OAUG), the study showed in concrete detail what had become obvious to close observers: Oracle had a real problem with user satisfaction. I'm sure there was a lot of yelling in Redwood Shores when the study came out. But the end result was a rapprochement with OAUG and the assignment of a senior vice president to fix the customer satisfaction problem. If and when Oracle pulls out of its current slump, it will be in large part due to the impact this independent study had.
Of course, this would never happen at Siebel, with its perfect customer satisfaction rating. Or would it?
With no one in the press or analyst community able to objectively verify his claims, we'll never know whether Siebel is the best thing that ever happened to software, or just another closed-door disaster waiting to happen. Until it's too late.
(Editor's Note: Click on the Page 2 link to see a response from Siebel Systems.)