Thus spoke Siebel's new chief executive, George Shaheen, the former head of integration powerhouse Anderson Consulting and dotcom Kool-Aid maker Webvan. Of course, this was Mike Lawrie's position when he took over as the head of the embattled CRM vendor last year, a position that looked at the time to be as tenuous as it proved to be.
See Story: Lawrie Out at Siebel.
It was almost too easy to see that Lawrie was being set up for a fall, being that his mandate was to continue an unworkable status quo at the once-feared CRM juggernaut. Admittedly, Lawrie was Tom Siebel's first go-around at divesting power, and it wasn't likely that a lot of real power was going to be handed off to Lawrie without a fight. Things will probably be a little different this time around.
The reasons I didn't believe Lawrie would last when he was appointed a year ago are still valid, and while there have been some good quarters since Lawrie took over, the overall picture at Siebel has been going from bad to worse. Indeed, the problem with Siebel is that all the problems that should have been tackled when Lawrie took over last year have had a whole year to fester, and the prospects for turning Siebel around have only dimmed with time.
Granted, there's $2.2 billion in cash floating around, a number that frankly looks much more impressive than it is. To paraphrase a line from my misspent youth, strategy will get you through times of no money better than money will get you through times of no strategy. Ever since Ashton-Tate spent the late 1980s squandering an unbeatable brand -- dBase -- and a few hundred millions in cash on a bad strategy and buggy products, the software industry has been littered by the bones of once cash-heavy companies caught with nowhere to go.
Against the Tide
So where can Siebel go now? Here's my prescription for our ailing patient. Step one is to use all that cash to broaden the product base, and do that quickly through acquisition. Think Lawson or something similar. Step two is to take the new products and start moving them quickly in two directions -- tight integration with the core CRM product, and a solid portfolio of on-demand offerings. Step three is to take George's understanding of the consulting world and step up the kinds of service offerings that Siebel can provide around its knowledge of the CRM world.
Step four is to hope that it can be done quickly enough to stem the rising tide. Because the tide is rising so fast that it's not clear Siebel can be saved. CRM is so strategic to the core of enterprise functionality that standalone vendors like Siebel are terribly limited when it comes to serving their customers' growing needs.
The customer record is now such an essential part of managing the supply chain, the logistics chain, after-market sales and service, strategic procurement and business forecasting that integration to the rest of the enterprise is no longer just a good idea. And this integration can be enormously costly when the enterprise is trying to link a standalone CRM product like Siebel to a broad-based set of back and front-office systems.
It's so much easier and logical for customers to try to hook their big suites -- like SAP and Oracle -- to these respective vendors' CRM offering than take on the complexity challenge that Siebel offers. Especially as most existing Siebel customers also are SAP and Oracle customers.
And don't forget the Salesforce.com challenge at the low-end.
At a minimum, this year's conference call on the hiring of the new CEO sounds much better than last year's call. Mostly because Shaheen very specifically said that a review of the company's strategy and offerings was in the works, and that it would take place in the current quarter. That's a far cry from Lawrie's steady-as-she-goes mandate.
Will George Shaheen be the next unwitting interim CEO of Siebel, or the architect of a last-ditch effort to keep Siebel in the game? I give George one good year to prove his mettle -- not because I'm stingy, but because that's really all the time that's left to keep Siebel from following the legacy of Ashton-Tate and few dozen other once-great software companies.
Good luck, George. You'll need it.