Into the light

Carriers saw the light before Siebel Systems did. They started adapting the vendor's applications software to fit their needs before Siebel followed suit.

In the beginning, Siebel focused on the enterprise space, developing applications for the finance, banking, computer, manufacturing and software markets. Then the company realized carriers were customizing its software.

“In the mid-90s we saw some of our earliest communications companies like MCI and Telenor configuring our applications,” said Dan Ford, general manager at Siebel Communications.

So Siebel decided to pre-build functionality into its applications to allow carriers to deploy them faster, Ford said. The result of Siebel's development efforts is the eCommunications software suite, released in 1998 and now called eCommunications 2000.3. It enables personalized Web-based selling and service, so communications companies can capture and validate orders before provisioning. The applications also let providers serve customers across multiple channels such as the Web, e-mail, call centers or third-party reseller organizations.

The eCommunications software suite is part of Siebel's eBusiness applications software, which has evolved since its inception in the early 1990s. It started with sales force automation and customer service and support. That led to the development of customer relationship management (CRM) solutions, which, with the advent of the Internet and marketing automation, combined to create the eBusiness suite.

“Incumbents have spent lots to deliver what we build out of the box. [Now] they have seen the benefits of buying packaged software instead of building their own,” Ford said. Siebel has built an entire business unit focused on designing, developing and delivering eBusiness software specifically for the communications industry. Today, the communications sector currently encompasses 29% of Siebel's business. Siebel generated about $320 million in licensed revenue for the communications industry last year, outstripping its leading competitors — Clarify, which is embedded in Nortel Networks' suite of operations support system (OSS) applications, and Vantive, now owned by PeopleSoft.

In addition to helping telecom companies manage customer access points, including the Web, call centers, field organizations and distribution channels, Ford sees Siebel as an enabler of the front office of OSS processes (see figure).

“We've focused on enabling functionality that accelerates integration with back office systems,” Ford said. “And [we] rely on a number of significant customers to help us build this functionality [so] that it embodies the best practices of leading service providers around the world.”

Siebel currently has 275 communications customers, including integrated communications providers, DSL providers, local multipoint distribution service carriers and wireless operators, as well as media companies and Tier 1 carriers. Its customer list includes AT&T, BT, Cox Communications and wireless providers such as Verizon, NTT DoCoMo and Telecel.

Like most solutions providers in the telecom industry, Siebel also relies on partners. The company established the Siebel Alliance Program to develop relationships with businesses that specialize in systems integration, middleware, billing, content and distribution, order management and interconnection.

“[Siebel] has been very successful in terms of signing up partners, and that is a tribute to how successful they've been in the space,” said Rob Rich, executive vice president of The Yankee Group. “[But] I don't know how effective they've been in implementation of those partnerships. Partnerships only work when there's mutual gratification from a financial perspective.”

One of Siebel's strong points is its eCRM component, Rich said. “As competition increases, the need for eCRM is increasing almost exponentially. Siebel's eCRM packages are probably some of the hottest in the market,” he said.

While Siebel controls a significant piece of the CRM market, there are inherent compromises when using a general platform for telecom-specific purposes. One is time-to-market.

“They're always a little bit behind from a time-to-market perspective,” Rich said. “It takes time getting telecom knowledge put into a generalized suite.”

As Siebel competes against Clarify and PeopleSoft, another major competitor could be on the horizon. “I think Oracle is a sleeping giant in this industry right now,” Rich said. “Siebel is very hot,… but I think Oracle will be a formidable competitor if they decide to focus on the telecommunications industry in the application space.”

Keeping with its momentum, Siebel will release the next version of its product this summer. Siebel eCommunications 2001 will feature a pure HTML client for its customers to deploy the application more quickly and to reduce the cost of ownership, Ford said.