Did Siebel Steal PeopleSoft’s CRM Thunder?

Why did Gateway license Siebel's CRM software if it was already using PeopleSoft's?
Joseph RadiganJune 13, 2001

With PeopleSoft’s unveiling earlier this month of its long-awaited customer relationship management system, PeopleSoft 8, the competition in this already hot software market is reaching a fever pitch just in time for summer.

The version unveiled this month relies on a Web-browser interface for both the CRM and enterprise resource planning (ERP) systems, and PeopleSoft’s claim to fame is that both systems are tightly integrated with one another. But this boast didn’t seem to carry much weight with Gateway Inc., which purchased an enterprise-wide license for Siebel Systems eBusiness Applications.

The curious thing about Gateway’s shift to Siebel, is that the PC maker had already licensed a CRM system from Vantive, which PeopleSoft bought in December 1999 as part of its strategy to broaden its presence in the CRM field. Rather than scrapping Vantive, a Gateway spokesman said the computer maker will operate the two systems side by side.

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“We continue to see Vantive as important to our CRM strategy,” says a Gateway spokesman. “We think our client support is going to be one way we differentiate ourselves.”

“We really saw that Siebel had the tools that would help us with our infrastructure to service client relationships,” the spokesman notes.

A PeopleSoft spokeswoman says Gateway is using the Vantive applications for customer call centers in the U.S. and Ireland, the Field Service function for its U.S. sales force and the Sales function in Ireland.

A spokeswoman for Siebel says Gateway is using Siebel as an enterprise-wide CRM system in conjunction with the Vantive apps and a J.D. Edwards CRM program for sales-order entry.

Beyond that, Gateway has little to say. The company’s CFO Joseph Burke and CIO James Pollard will not be available to comment until the Siebel installation is completed in several months, explains the Gateway spokesman.

The lack of details about Gateway’s license with Siebel left several industry analysts scratching their heads. Was this a major coup for Siebel? Or was it simply business as usual?

It depends on who you talk to.

“There are plenty of installations where you have Vantive for the call center and Siebel for sales force automation,” says Sheryl Kingstone, a program manager for the Boston-based market research firm Yankee Group.

Some companies will go for a best of breed approach with their software, and while Vantive has a good reputation with customer call centers, Siebel, Kingstone says, “is the 800-lb. gorilla in SFA.”

What’s more, Gateway’s decision to use Siebel could be yet another example where the business need drove a technology decision. The company spent years specializing in the consumer market, where an automated call center would be important. But the firm was a relatively recent entrant into the corporate sales market, and it probably didn’t have much of a need to automate its sales force until now.

Bob Chatham, a principal analyst for Forrester Research in Cambridge, Mass., says it’s not unheard of for one company to operate two CRM platforms. Not all firms have standardized their entire operations, and different departments may need different systems.

Then again, there may be some ominous implications for PeopleSoft. Michael Maoz, an analyst with Gartner Inc. in Stamford, Conn., says there are roughly 350 corporate installations with PeopleSoft’s Vantive CRM that are at something of a crossroad.

If they stick with PeopleSoft, they’ll ultimately have to leave Vantive and switch to the PeopleSoft 8 platform. That opens an opportunity for rival vendors to pitch their wares to these accounts, and Siebel, to its advantage, has a large and loyal network of resellers and systems integrators that generate plenty of new business.

Maoz says this a tremendous advantage for Siebel.

Kelly Spang, an analyst with Current Analysis in Sterling, Va., says PeopleSoft missed an opportunity by not integrating the Vantive CRM with its core ERP platform sooner. Vantive was acquired in 1999, and it was a year-and-a-half before an integrated product was ready.

The PeopleSoft spokeswoman counters that in the 18 months since Vantive was acquired, enhancements were made to the system. Last December, a management analytics function was introduced that allows senior sales executives to study customer profitability and purchasing patterns.

But Spang says the delay in introducing the fully integrated system has taken its toll. “They lost a chance to influence the market,” she says.