OnDemand is a Web-based product that is licensed to companies on a per-user, per-month basis, which means they can implement the customer relationship management (CRM) system without having to manage the hardware or software that is traditionally associated with business applications.
The Siebel product is essentially a rebranded version of a CRM package made by UpShot, a company that was acquired by Siebel in October.
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BT said it will host the CRM service for small businesses through its Siebel-based Contact Central arm, which already offers Web-based applications.
Paul White, director of BT Contact Central, said BT and Siebel will be competing directly against Salesforce.com, but he also expected to come up against IBM, another of Siebel's major OnDemand resellers.
"Yes, I think you will find that they (Salesforce.com) have a similar offering, and I'm sure there will be times when we will see," White said. "But we have got an offering that is clearly differentiated--if customers want a permanent solution, they can have one, and if they want an on-demand solution, we can provide that, too."
He also said that although the service is not expected to be "mass released" until the middle of February, the first beta customers would be testing the product before the end of this year.
White told ZDNet UK that BT already has more than 60 Contact Central customers, so the deal was a "natural extension of our relationship."
Munir Kotadia of ZDNet UK reported from London.