Siebel struggles to turn the tide

Siebel Systems reported a further drop in licence revenues in the quarter ending 30 June. Revenue rose four per cent on last year, but restructuring charges forced the vendor to post a $50m net loss, compared to net earnings of $7.5m last year. 

Sales of new software, a key metric in gauging Siebel's financial health, fell 17 per cent to $78.3m. Maintenance contracts with existing customers provided $122.8m in revenue and services, and other revenues totalled $112.5m.

"Although Siebel has made some progress, we still have more work to do," said chief executive George Shaheen.

Shaheen pointed to a reorganisation of the US salesforce, the appointment of a new marketing officer and a refocusing of business development as steps the company is taking to return to profitability.

Siebel is facing tough competition from online providers including Salesforce.com, while large enterprise software vendors such as Oracle and SAP are moving in on its territory from above.

The company that pioneered the market for customer relationship management software fired its chief executive last April and appointed board member Shaheen as his replacement.

Siebel launched Siebel OnDemand last year in response to the rise of Salesforce.com. The online CRM service signed up 6,460 new users in the past quarter to a total of 39,668.

Salesforce.com boasts more than 267,000 subscribers to its online CRM service.

A report published yesterday by consulting firm Accenture suggests that widespread and costly investment in CRM tools has not resulted in a better service for consumers.