With hosted software becoming more and more popular and companies like Salesforce.com and Onyx leading the charge in the hosted CRM/SFA space, Siebel seems behind the curve in incorporating this trend into its offerings.
Now, in fairness to Siebel, the company along with Accenture, did roll out its Universal Application Network -- an integration engine powered primarily by partners -- to incorporate Web services and make integrating third-party and legacy systems easier, but, according to some industry watchers, the company is still late to the game.
"Maybe I'm being really simplistic," said Laurie McCabe, a vice president and practice director at Summit Strategies. "It all boils down to they were, and in some ways still are, king of the CRM heap. But they kind of refuse to see the next thing coming. You know, almost like victims of their own success.
"Now they're no longer the innovator. They were the innovator and it's hard to shift gears business-wise, technology-wise and I think harder business-wise."
Not everyone at Summit sees things the same way, however. Dwight Davis, also a vice president and practice director who follows Web services for Summit, told ASPnews Siebel is actually in the fore when it comes to integrating solutions via Web services.
"I would say that the pack has closed a little bit but, at least in the early days, they were fairly aggressive on this front and I think there still right up there," he said.
The biggest difference between Siebel's integration offering and its competitors like PeopleSoft, SAP and Oracle is Siebel is relying on third-party vendors like IBM, TIBCO and Microsoft to provide integration tools. For Siebel's part, the company only provides a library of standards-based common business objects to make linking applications easier.
This could lead to stronger partner relationships in the long run believes Davis since Siebel won't be competition with them for their middleware business, unlike its competition.
Also in fairness, Siebel also was one of the first enterprise ISVs to get into the ASP game but quickly rolled that money-losing offering up because, at some levels at least, it cannibalized its own business, said Joshua Greenbaum, principal at Enterprise Application Consulting.
What seems to working against the company, and it's hard to be sure since Siebel declined to be interviewed for this article, is a two-fold problem: it has years of features-based legacy code to unravel and open up to standards like XML and SOAP, and its business model is geared towards stand-alone, monolithic implementations that are not integration friendly, said Marc Bennioff, chairman and CEO of Salesforce.com, which is quickly becoming one of Siebel's biggest competitors.
All this at a time when companies have drastically curtailed large layouts of cash for software and are looking for more componentized offerings.
"That's not what customers want today," he told ASPnews. "Customers want a solution, they want an immediate result, they want low cost, they want ease of use. And that's the fundamental problem with Siebel and that's why their license revenue has dropped."
Greenbaum agrees with Bennioff, stating Siebel's biggest challenge isn't necessarily technology but a business mindset that is wanting.
"More than an architecture issue I think it's more about the overall strategy of the company," he said. "They're still very much locked into a model that treats CRM as a stand-alone silo and as a very complex integrated suite with a very broad product footprint."
At Onyx, which opened up its entire CRM offering to Web services user interface pointers over a year ago, Mary Reeder, Onyx's CTO, believes Seibel's troubles stem from similar issues.
"We were more nimble getting to a net-native architecture and, right now, getting to the fourth generation of it, because there were certain things about even our client/server architecture that lent itself to that migration more than other competitors," she said. "I think (Siebel) spent more time fighting the feature/function war."
To thrive again, said Greenbaum, Seibel has to rethink its position in the market and pay more attention to how, where and why customers are spending their money.
"I really think the business model of the company is fundamentally at risk," he said. "It needs to be rethought. And that's not something you can fix by going back to technology. Technology is certainly going to be one of the important ways to do it, without a doubt. It's as much a fundamental problem with how they look at the market as it is how they deliver technology."