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The Software Revolutions of 2005

1848 was a pivotal year in European history. A similar year of change can be expected to take place this year in the enterprise software business. In European history the stage was set for the events of 1848 by the economic effects of severe crop failures merged with the discontent caused by political repression of nationalist aspirations. This year in enterprise software, the stage was set by economic failures of an entire generation of software companies that attempted to take advantage of the internet but failed spectacularly and squashed entrepreneurial aspirations.

Sparking the changes of 1848 was a revolution in France that soon spread to Western and Central Europe. Sparking the changes of 2005 is Oracle’s acquisition of PeopleSoft. Three trends that underlie today’s revolution in software are:

• Software as a Service. Just as the first generation of ASP’s are finally being folded into larger institutions (i.e. IBM’s acquisition of Corio) a new generation of software companies is coming into fashion. The new generation hosts its own software and offers term instead of perpetual software licenses. Siebel CRM On Demand is one of these companies. In twelve years, Siebel Enterprise has gone though seven major releases. In fourteen months, Siebel CRM On-Demand has gone though as many. This is revolutionary by any measure.
• Globalization. According to Gartner, offshore IT services spending is expected to reach $50 billion by 2007. IDC analysis anticipates that the worldwide IT outsourcing market will grow to $18 billion by 2008, at an annual compound growth rate of 20%. By 2008, IDC estimates nearly one-quarter of U.S. spending on application development, integration and management services will go to offshore providers.
• Open Source. The growth of Linux is taking even its creators by surprise. Linus Torvalds has written “I'd like to say that I knew this would happen, that it's all part of the plan for world domination. But honestly this has all taken me a bit by surprise.” Linux today has millions of users, thousands of developers.

The revolutions of 1848 failed notably because three kinds of demands—social and economic, liberal, and national—were not easily reconciled. The software revolution of 2005 may fail because the three leading trends –software as a service, globalization, and open source – are not easily reconciled. The results of the uprisings in 1848 were the spread of parliamentary governments, the extension of suffrage in France and Austria and the beginnings of the German and Italian unification movements which were good for the citizens of those countries. The results of the software revolution of 2005 are likely to be similarly sweeping and good for the customer.

Offshoring, Inshoring, Nearshoring, and Smartshoring

What is the difference between offshoring, inshoring, nearshoring, and smartshoring?

All apply to outsourcing which is contracting with outside consultants, managed service companies or any other third party to perform information technology tasks based on service-level agreements.

• Offshoring, as the name implies, is when the outsourcing is done beyond a country’s borders, usually overseas. Typically this is done to lower costs. Products were the first economic goods outsourced and China has emerged as the preferred destination for manufacturing while India has emerged as the dominant player for services and in particular IT services.
• Inshoring means outsourcing within the U.S. or E.U.
• Nearshoring is defined as outsourcing to lower cost locations that are close geographically (as in a U.S. company outsourcing to Canada or Jamaica)

Press Conference Planned

Bruce Cleveland, Senior Vice President and General Manager, OnDemand and SMB, will host a Webcast press conference and product demonstration on March 29, 2005 at 11:30am Pacific Time/2:30pm Eastern Time.

A live audio broadcast of the event can be accessed by calling 1-800-621-8586 from inside the U.S. or 1-517-645-6286 from outside the U.S. and the Audio Passcode is PRESS. The event can also be accessed live at: https://www.mymeetings.com/siebel/

Conference Number: PG6945628 Audience Passcode: PRESS

Mercury Wins Editor's Award

Mercury Interactive Corporation (Nasdaq: MERQ), a business technology software company, announced that it has won the Intelligent Enterprise 2005 Editors' Choice Award for Application Management. Mercury was recognized as one of the 12 most influential vendors by Intelligent Enterprise Magazine at its seventh annual Editors' Choice Awards event.

Salesforce.com CFO to Host Investor Lunch

Salesforce.com's (NYSE: CRM) Chief Financial Officer Steve Cakebread will be presenting to investors in Chicago on Wednesday, March 30, 2005 at 10:00 AM (PST).

The lunch event is invitation-only, however a live audio webcast will be made available at www.salesforce.com/investor.

Report Predicts China WIll Be No. 1 Destination For Outsourcing

According to a report released this week, although India is the most competitive and popular technology outsourcing destination in 2005, China will be the most popular technology outsourcing country within 10 years. In making this prediction, the report's authors assessed the long-term competitiveness of 30 countries by determining thier GDP growth, population growth, the quality of the labor pool and took into account analysis from leading entrepreneurs, economists and other experts.

The Global Outsourcing Report was compiled by Frank-Jürgen Richter, President of Horasis, a Geneva-based strategic advisory firm that develops globalization scenarios and Mark Minevich, a principal at Going Global Ventures, a U.S.-based international consulting and venture advisory firm.

A copy of the report can be downloaded -here-.

What To Hate About Siebel Systems As A Business.

As an investment, there are few things to hate about Siebel Systems (Nasdaq: SEBL):

• Ironically for a company selling software to improve customer service, it continues to have some lingering problems with customer satisfaction,
• While most people would agree the culture is becoming more professional some of the drive that charcterized the company also seems to be lost,
• deflation.

The only prudent course is to weigh the good and the bad and make a choice. No one said investing is easy.

What to Love About Siebel Systems as A Business

As an investment, there is a lot to love about Siebel Systems (Nasdaq: SEBL):

• The company is profitable,
• It was over $2,000,000,000 in the bank,
• The management team is talented,
• Most employees are very intelligent and hard working,
• Many customers have concluded they can not run their business without Siebel products,
• Much of the market for CRM products remains to be penetrated,
• Third party system integrators report healthy demand,
• There is a demand for IT workers with Siebel skills and some companies are paying recruiters again,
• Oracle has disrupted, and may even shut down its closest competitor PeopleSoft.

Who wouldn't want to own a company like Siebel? Yet it is never a good idea to fall in love with an investment. A study done by the University College London, and published in NeuroImage, found that feelings of love lead to a suppression of activity in the areas of the brain controlling critical thought.

SAP Backs Down, Oracle Wins Another Acquisition

SAP (NYSE: SAP) has announced it will not increase its offer for Retek, which has subsequently terminated its merger agreement with SAP. As stated in SAP’s recent press release, the $11.00 per share cash tender offer was SAP’s best and final offer, and SAP intends to continue to exercise financial discipline in merger and acquisition transactions.

“As a disciplined investor, SAP established a premium price for this niche business. However, we concluded that neither our shareholders nor retail customers would benefit from an auction process", said Henning Kagermann, CEO of SAP.

SAP is withdrawing its tender offer and any shares previously tendered will be returned.

InFact Demonstrates ROI Using Siebel CRM OnDemand

InFact, the French technology consultancy reports it is saving $33,000 every quarter using Siebel CRM OnDemand. Automated forecasting is helping to improve pipeline visibility, manage multiple currency transactions, and drive better business return. CRM On-Demand has also enabled InFact to reduce its sales cycle time by 20% and increase the effectiveness of its marketing campaigns.

"InFact trades in multiple currencies around the world, and it used to take one person up to four days each quarter to pull together all the different currency rates and fluctuation allowances into one consolidated spreadsheet forecast," said Richard Napier, Director of Business Development, InFact Group. "With Siebel CRM OnDemand, currency conversion, historical exchange rates, and roll-ups are all done automatically. This automated forecasting is saving InFact $33,000 each quarter."

Based in France, The InFact Group has a global technology consulting presence and deployed Siebel CRM OnDemand in Europe, the United States, and India last year.

InFact also uses sales analytics tools within Siebel CRM OnDemand to compare average sales cycles, win rates, deal sizes, and other key performance metrics. The company can analyze customers and prospects by industry, region, and even city. At sales meetings Siebel CRM OnDemand is used to display revenue forecasts for the quarter by industry, channel type, and geography.

"As a small, fast-growing organization, we wanted to capitalize on the benefits of CRM, but couldn't afford the investment in an on premise CRM solution," said Napier.

With Siebel CRM OnDemand's support for English, French, Spanish, Italian, and German, European companies are now taking advantage of Siebel Systems' hosted solution.