Analysts cast doubt on Siebel leadership swap

Analysts are questioning whether the leadership change at Siebel Systems is enough to revive the fortunes of the ailing customer relationship management (CRM) firm.

The company announced earlier this month that it was replacing chief executive Mike Lawrie after just 11 months in the job, following disappointing first-quarter results. But the news took even its own people by surprise.

At Siebel's fifth annual European customer conference in Barcelona last week, neither the agenda nor the promotional material had been updated to reflect Lawrie's replacement by long-standing board member and former Andersen Consulting chief, George Shaheen.

Shaheen told delegates that he plans to continue with a programme instigated by Lawrie to revive the company, a move that has baffled some analysts.

'In the enterprise applications market, there's almost no such thing as a one-quarter revenue problem,' said Erin Kinikin, vice president of Forrester Research's enterprise applications team.

He says a change of leader will not solve Siebel's problems, which stem from the fact that the market has become too commoditised for a best-of-breed vendor to be perceived as being able to add extra value.

Teresa Jones, senior research analyst at Butler Group, says Siebel's previous growth rates of 70 per cent year-on-year, when CRM was still new, were totally unsustainable.

'In a maturing market, you can't expect continued growth in double digits. In this case, the quarter's forecast was quite good but delivery was poor,' she said.

Shaheen says he wants to rationalise costs and cut margins, as well as innovate through acquisition, attain better customer service and offer new products such as a hosted solution for markets such as mid-sized businesses.

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