Part 2: The Nails in Siebel’s Coffin
There were fundamental flaws in Siebel’s strategy. Learn why Salesforce was destined to win and Siebel was destined to lose – and how this applies to telcos’ journey to the public cloud
Who doesn’t love a great business story?!
The battle for the CRM market waged between Siebel and Salesforce was epic. And the objections Salesforce overcame will sound totally familiar to you telco execs.
Transcript:
Hi, I’m Danielle Royston, the CEO and founder of TelcoDR. You may know me from such hits as “I’m totally going to MWC” and “IBM is #fakecloud”. But most people know me as the girl who always has something interesting to say, and I’m not going to disappoint you today.
Are you ready? Today, I’m going to talk to you about the huge business potential of the public cloud. But I’m going to start with a story about a corporate battle, because who doesn’t love a great business story?
How many of you know about the war between Siebel Systems and Salesforce? In the late 1990s, Siebel, founded by Tom Siebel, was the darling of CRM software. Back in 2000, they were flying high. Their stock had risen from an IPO price of $2.19 to an incredible $120 by November 2000. They were unstoppable. They had 45% market share for their full-stack, on-premise CRM package, which was installed at some of the world’s largest companies.
One thing was for certain: Siebel was more than happy to let you customize to your heart’s content. It was expensive to do that, but it was the gold standard. You could call them the Amdocs of CRM.
But then this tiny challenger called Salesforce came along. Your classic San Francisco startup, working 24/7 at someone’s apartment (Mark Benioff’s apartment, to be exact).
And back in 2000, Mark had a great idea: There should just be one CRM. Companies didn’t need their own CRM installed on-premise. His idea was to build the world’s first web-scale enterprise application in CRM, with no software to install. Customers would pay to use it, and they would access the software through the internet. Nothing would be installed on-premise.
There was a catch: To use the software, customers had to give up control of the stack and let Salesforce manage their precious customer data for them. But it would be cheap as hell.
Mark was going to take Siebel head-on.
So what did everyone say to Mark’s brilliant idea? They said they would never do it. Everyone said, “Never in a billion years would we let this random startup manage our customer data.”
The list of reasons why Salesforce would never work was a mile long. It wouldn’t work because:
But wait, there’s something strangely familiar about that list. That list is the same list I get from all you telco execs about why you can’t use the public cloud.
It may be 21 years later, but the objections to the public cloud are the same.
So let’s go back to our story and find out what ever happened to Siebel and Salesforce.
Salesforce, of course, figured it all out and got customers to get over their issues, trust them, and give them their data.
Siebel, on the other hand, didn’t fare so well. After their stock had an all-time high in 2000, it then dropped 90%+. At which point, Oracle bought Siebel for $10.66 per share. Siebel sold out to his hated enemy Larry Ellison, and Oracle and Mark Benioff took over the CRM market, surpassing Siebel’s all-time high stock price and never looking back.
So where are all those naysayers who said no customer data could ever be stored in the cloud? How did all those objections about security, privacy, and the internet going down turn out?
They were all wrong!
The public cloud is here to stay, and it’s only going to get bigger and better. So if you’re still not using the public cloud, now is the time to start.
Thanks for listening!
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