Siebel, whose company recently entered the customer relationship management (CRM) hosting market, made the forecast on Wednesday while discussing the company's fourth-quarter financial performance with securities analysts via teleconference.
The outspoken chief executive also claimed that Siebel would become a top player in the software hosting field, much as it dominates the CRM software market today. "We'll indelibly change the dynamics of the hosted CRM marketplace for the next couple of years," Siebel said.
With the market for CRM software expected to top $3.5bn (£1.9bn) in licence revenue by 2006, according to Forrester Research, 15 percent is far from loose change. Witnessing the rise of hosting rival Salesforce.com, which is getting ready to go public this year, Siebel dashed into the software-as-a-service field last fall through a series of partnerships and acquisitions.
Siebel touts partnerships with IBM and British Telecommunications, which have each agreed to host and sell Siebel's $70-a-month software, called Siebel OnDemand. The company acquired Salesforce rival Upshot to further boost its OnDemand business, and said this week that it would scoop up Ineto Services, a 15-person company specialising in hosted contact centre software, for as much as $5m.
Siebel quietly released the hosted system that it developed with IBM in December, said Siebel executive vice president David Schmaier. He declined to say how many customers have signed up for the service, but noted that Siebel has turned up 5,000 sales leads for its OnDemand product, and 500 companies have expressed interest in it.
"Interest is quite high," Schmaier said. "We think this is a big market and a fast-growing market. We think much of that business in the pipeline will close."
Salesforce, Siebel's high-profile rival in that niche, appears to be on the offensive. The company issued a series of press releases this week claiming that several Siebel OnDemand customers are switching to Salesforce's competing service. Siebel executives brushed off the threat when asked about it during Wednesday's call.
Despite optimism for their budding hosting business and the CRM software market in general, Siebel executives refused to offer financial guidance for the second half of 2004 or call an IT spending recovery, citing a still unpredictable economy. "We are clearly not in the business of predicting what the economy will do," Siebel said. "I would like to believe [the fourth quarter] was not seasonal, but only time will tell that."
Talkback
I've been using Siebel in work now for some months and sincerely hope that either a) they are replaced in their position as market leader by someone capable of producing decent software or b) they learn how to program.
The needless overcomplication is abundantly clear from the outset. I'm studying for a degree in computer science, something most advisors using the system wont be doing and there are still parts of the system that seem a mystery to me. If Siebel's products are to be powering CRM systems for many companies in the future, god help Joe Consumer.