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Court halts Siebel ads that knock SAP

The German advertising campaign and subsequent legal fight mark another chapter in the ever-increasing battle between the two to dominate the CRM software market.

Siebel Systems has been ordered to stop a German advertising campaign that is critical of rival software maker SAP.

Germany-based SAP said in a statement on Tuesday that the Frankfurt District Court granted it an injunction halting the Siebel ad campaign. The ad campaign and subsequent legal fight highlight an ever-increasing battle between the two companies to dominate the market for customer relationship management (CRM) software.

Carol Burch, SAP's senior vice president for CRM, said the company was pleased with the injunction and called Siebel's ad campaign "unfair and desperate," adding that both companies should concentrate on serving customers.

Not surprisingly, Siebel had a different take.

The San Mateo, Calif.-based company said Wednesday that SAP got the court to rule in its favor "without a hearing or a discussion of the facts."

The spat between Siebel and SAP is the latest skirmish between the No. 1 and No. 2 CRM software companies. Chief information officers have cited CRM software as a top priority even though implementing the software often does not live up to expectations.

The software is intended to streamline customer service, give salespeople the customer information they need to close deals faster, simplify marketing and sales efforts, and help companies find new customers and generate more revenue from existing customers.

Siebel said the banned ads presented factual statements about SAP and its CRM track record. The ads, which tout Siebel's position relative to SAP, are standard issue in the United States. Companies such as Oracle and IBM frequently duke it out on billboards and magazine pages.

Siebel's ads tout the company as the No. 1 CRM supplier among SAP customers and use statements such as "Bayer Runs Siebel" and "Deutsche Telekom Runs Siebel," Siebel said. SAP has had ads in airports and other outlets using similar language.

The other Siebel ads in question focus on the history of CRM software releases by Siebel and SAP, arguing that Siebel has been more successful.

"The ruling against Siebel Systems' ads is particularly surprising given that there is no question of the factual nature of the advertising," Jeff Amann, general counsel for Siebel, said in a statement. "Nevertheless, it is our full intention to abide by the legal obligations set forth in this ruling."