Can Siebel Stop Its Slide Essay

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In the fall of 2001, business software pioneer Thomas M. Siebel was giddy as he looked ahead. Sure, the recession was hurting. But he claimed his company, Siebel Systems Inc. -- the leader in software for managing sales forces and customer-service departments -- would be more resilient than its competitors. ``Everybody is going to be naked,'' Siebel said with relish. ``We're going to find out who are the dilettantes. We're going to find out who are the scumbags, and who are the sleazeballs. Everybody is going to be exposed for who they are. It's going to be a remarkable time.'' Two months later, he confidently predicted that the high-tech downturn was about to end. He could be certain, he said, because of the forecasting capabilities in…show more content…
Yet he denied there's anything wrong with the company that a strong economy can't fix. He believes that only 9% of the potential market for his software has been tapped and that his newest technologies will keep his company on top of its competition when demand returns. ``If I were to take this company today and compare it to this company in 2000, there's no doubt in my mind I'd say this is a much better-positioned company,'' he says. Analysts think he's overly optimistic. True, the customer-management software market is expected to start growing again next year, by 10%, to $3.3 billion. But analysts say Siebel Systems will no longer dominate. As the market leader, it gets most of the blame for a groundswell of dissatisfaction with this kind of software, which can cost upwards of $10 million and take a year or more to install. A recent Merrill Lynch & Co. survey found that only 45% of customers are fully satisfied with their purchases of this software. At the same time, Siebel Systems faces tougher competition than ever before, and Tom Siebel is ``underestimating it,'' says analyst Joanie Rufo of AMR Research Inc. in Boston. The company's revenues are expected to drop 8% this year, to $1.5 billion, the lowest in four years, according to Banc of America Securities. To turn the company around, the chief executive will have to overcome some daunting challenges. After gobbling up software at a

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