Looking Forward by Looking Backwards in the CRM World

One of the first BIG issues I worked on while a journalist with CRM magazine had Tom Siebel as the cover story. This was back in October of 2002. Now, realize, this was NOT Siebel’s heydey – but quite the opposite. Still, it was a great interview in a lot of ways.

The CRM Magazine blog recently posted some real chestnuts from this interview. Obviously, the biggest “wow” is Tom Siebel dismissing the nascent SaaS providers out there. The money quote:

CRM: Do you believe the hosting model for CRM like the one promoted by Salesforce.com is a threat to vendors like Siebel?

Siebel: They’re not in my consideration as a competitor. I believe I have never encountered them competitively in nine years. And I am absolutely satisfied that they do not have a viable business model.

So, did Salesforce.com bring down Siebel? Not really. I would argue the company’s inability to scale down was its main undoing as an independent entity. But, yeah, the kind of competition SaaS providers offered was major.

And we can not forget the irony in this interview as Siebel made a somewhat significant acquisition in the SaaS space soon after in buying UpShot.

So, what can we learn from all this today? I think that SaaS vendors (even the ones claiming to be cloud computing companies) should be looking out for true cloud providers and how they might steal their momentum. The greater flexibility, and ideally lack of lock-in risk makes a true open cloud offering far more compelling than monolithic SaaS products re-branded as cloud software.

I do think a lot of SaaS companies are innovating (or at least marketing innovation) and moving towards easier integration, platform plays, etc. But as the cloud creates more transparency, winners will emerge base don quality product and customer enablement – not fancy marketing or even price.

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