Siebel, IBM team up for hosted CRM

Siebel Systems and IBM are unveiling a hosted software product in an effort to grab some of the IT dollars small and midsize businesses are spending.

As previously reported, the product, called Siebel CRM OnDemand, is an attempt to sell customer relationship management systems via the Web rather than through traditional software licensing. The companies are hoping that corporate clients in need of CRM applications would rather access applications online than by going through the lengthy process of licensing and deployment.

Clients are "able to go online and switch this on," said Dev Mukherjee, vice president of strategy and marketing for IBM's eBusiness hosting services unit.

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Mukherjee added that the immediacy of this product contrasts with traditional methods of installing CRM software. "In a normal deployment, you buy the hardware, buy the license and pay someone to integrate it," he said.

Speaking to securities analysts via teleconference, Siebel chief executive Tom Siebel said CRM OnDemand is just the first in a series of hosted-software packages the company plans to sell. "You can expect more to come, and I think it will be quite interesting," he said.

He called the product the "Google of CRM," comparing it to the popular Web search-engine in terms of ease of use and wealth of information on tap.

Siebel Executive Vice President David Schmaier, also on the call, said the new product presents "a significant revenue opportunity" for the company.

The software will cost $70 a month per customer. The companies will release the service by the end of the year.

Siebel will initially target companies that have already deployed its products. The benefit will involve the speed with which new users can get their CRM systems up and running, according to a Siebel executive.

"It's a faster time to delivery," said Richard Gorman, senior vice president of products for Siebel.

Siebel will power the CRM application and interface, while IBM will provide the infrastructure on which the Web application is built.

Siebel and IBM are entering a hosted CRM market that's getting more crowded. Start-ups such as Salesforce.com have reported success in selling similar services and claim to have signed up some of Siebel's customers. Oracle has also touted its outsourcing software as one of its fastest-growing businesses.

Still, Siebel, with its clout as a CRM giant, may be poised to benefit from a growing market. Forrester Research predicts that hosted CRM revenue will grow faster than traditional CRM sales. However, traditional licenses will remain the primary way companies buy CRM software.

CNET News.com's Alorie Gilbert contributed to this report.