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Siebel phases out acquired software

The software maker plans to discontinue support for financial services software it acquired in 2000, opening a door for competitors to vie for major customers still using the aging product.

Software maker Siebel Systems plans to discontinue support this year for financial services software it acquired in 2000, opening a door for competitors to vie for major customers still using the aging product.

Fewer than 40 of Siebel's more 3,500 customers are using the version of the application it's phasing out, Siebel representatives said. Siebel gained the application, a customer information system, with the $1.1 billion acquisition of Janna Systems.

Janna, which targeted insurance, investment banking and equity investment companies, counted Allstate Insurance, Bank One, First Union Securities, Lehman Brothers and Merrill Lynch among its customers at the time of its acquisition.

Siebel executives declined to name those companies that are still using the older Janna software, which it plans to stop supporting completely by December. Just 10 Janna customers have migrated to Siebel's customer relationship management applications, said Rick Broley, vice president of the Siebel financial services product line.

Siebel released an update to its financial services applications in 2001 that incorporated many of Janna's features. The company charges no additional software license fees to upgrade from the Janna system to that product, Broley said. Siebel also offers tools to move data from one system to the other free of charge, he said.

Software companies frequently stop providing customer service, bug patches and other updates for older versions of their products. For instance, Siebel rival Oracle is discontinuing standard support for the 10.7 version of its business-management applications in June. SAP is stopping standard support for four different versions of its flagship R/3 software in December, and PeopleSoft is following suit on several versions of its human resource management and student administration applications this spring and summer.

Although software companies provide the latest versions of their software for free to customers that pay their maintenance fees, the consulting services and new hardware often required to upgrade can quickly add up to millions of dollars.

For that reason, Siebel competitor Interface Software is trying to lure Siebel customers still using Janna applications to buy its software instead of upgrading to Siebel. The privately held company announced Monday a Janna "migration service" to its software, which it claims is less complex than Siebel's. Interface, based in Oakbrook, Ill., has already attracted at least one former Janna customer to its camp since Siebel's acquisition of Janna, according to company spokesman John Lipsey.

Siebel's Broley said he'd never heard of Interface Software until Monday's announcement.

Analysts said it's possible that Siebel could lose some customers in the migration from Janna, but it's not highly likely it will lose many.

"Siebel paid $1 billion in 2000 for these customers and Janna's expertise," said Erin Kinikin, an analyst at Giga Information Group. "I'm sure Siebel will work very hard to keep as many of them as possible."