Gates to speak at Siebel gathering

Siebel Systems' choice of Bill Gates as keynote speaker at its customer conference next month raises some eyebrows. "It's a curious mix," says one analyst.

Tech Industry
Siebel Systems' choice of Bill Gates as keynote speaker at its customer conference next month is raising some eyebrows.

Most software companies would no sooner welcome Microsoft into their market than court an investigation by the Securities and Exchange Commission. But Gates, Microsoft's chairman and chief software architect, will address a throng of Siebel customers at its User Week 2002 in Los Angeles on Oct. 21.

Siebel is the leader in the $11.3 billion market for customer relationship management (CRM) software, which helps companies track sales, marketing and customer service activities.

Even as Gates delivers his address, his product developers will be putting the finishing touches on Microsoft's own CRM software, set to debut later this year.

The companies downplay talk of any rivalry, and insist that their respective products appeal to different spectrums of the market. Siebel sells to the very largest companies in the world, including Ford, Boeing and AT&T. Microsoft plans to market to companies with 500 employees or fewer.

Siebel's choice of Gates as a keynote speaker boils down to his star power, said a Siebel executive. "Bill Gates is an industry icon with a huge draw," said George Ahn, general manager of Siebel sales. "I'm delighted we got Bill."

Despite the feel-good comments, analysts say the companies are on a . Siebel is reaching out to smaller companies. It has a division, led by Ahn, dedicated to selling Siebel applications to companies with fewer than 1,000 employees. And Microsoft isn't known for being content with a narrow section of any market in which it competes.

"It's a curious mix," said Josh Greenbaum, an analyst at Enterprise Applications Consulting. "These two guys are largely competitors and have less and less reason to be in a co-opetition mode. Siebel doesn't make a compelling case for .Net (Microsoft's software architecture), and .Net doesn't make a great case for Siebel. Makes you wonder what Gates is doing there."

In a further sign of a budding rivalry between the companies, Siebel and Microsoft said last month that they will not renew a 4-year-old reseller deal that expires at the end of the year. The agreement gives Microsoft the right to resell Siebel applications.

Siebel signed the reseller deal with Great Plains, a maker of accounting software, before Microsoft acquired that company last year.

Gates' appearance may also speak volumes about where enterprise business applications--a new market for Microsoft--stand on his priority list. While Gates is speaking at Siebel's conference, he's not speaking at Microsoft's own business applications conference, called Stampede, being held this week. More than 2,000 consultants, Microsoft resellers and development partners are attending the event in Minneapolis, where Microsoft will discuss its CRM plans.

"That's a great juxtaposition," said Erin Kinikin, an analyst at Giga Information Group. "Where is Bill Gates when his own CRM product is being announced?"

A Microsoft representative said he didn't know why Gates was not speaking at Stampede, but that his keynote at the Siebel conference attests to the fact that Microsoft considers Siebel an important business partner.

Some see Gates' appearance at the conference as a political gesture intended to ease tensions. "It's an effort to reassure Siebel that Siebel is important to Microsoft and that Microsoft doesn't intend to compete with Siebel," said Matt Rosoff, an analyst at Directions on Microsoft, a Microsoft watchdog.

Microsoft is to recruit software makers, including Siebel, to support its forthcoming set of .Net products, the makings of a software infrastructure on which business applications like Siebel's could run. Siebel wants to remain in the good graces of Microsoft to ensure that its applications work with the latest versions of Microsoft databases and development tools.

In a sense, Microsoft is the lesser of two evils: It offers SQL Server, an alternative to databases from market leader Oracle, which is a more direct competitor to Siebel in the CRM market.

"Even without the resale relationship for CRM, Microsoft is an important Siebel supplier and Siebel is an important proof-point for Microsoft's 'enterprise' aspirations," said Kinikin.

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