Siebel Systems has ousted Michael Lawrie as chief executive and replaced him with George Shaheen, a former chief executive at Accenture and WebVan.
The customer relationship management (CRM) software vendor has suffered a period of poor performance since Lawrie took over the executive role from founder Tom Siebel 11 months ago.
Gartner analysts Michael Maoz and Robert Desisto said in a report published today: "Shaheen brings one of the most impressive track records in the business, but he is less experienced in the fiercely competitive world of software applications, and his success is not assured.
"Although Lawrie succeeded in bringing a new focus on clients, he was unable to stop competitors such as SAP, Salesforce.com, Amdocs and Oracle from winning key deals.
"No single rival will deliver a knockout punch to Siebel, but the erosion of Siebel's competitive position has left it vulnerable to takeover, and has begun to raise concerns among prospects and customers."
Shaheen said in a conference call: "The disappointment in the last quarter has led me to believe that we have to look at how we do what we do and make those changes necessary to deliver the objectives that we laid forth. I do not feel we are in that position today and I intend to address it."
Erin Kinikin, a vice president with Forrester Research, suggested to vnunet.com that Lawrie became the victim of a problem that was not of his own creation.
"He was focusing on the long term, but he got fired for missing short-term revenue projections," she said.
The company is stuck in a market that faces commoditisation and has reached saturation point, according to Kinikin, and must now figure out where it wants to achieve future growth.
The decision by the Siebel board followed a week in which the company revealed quarterly results that missed expectations.
The dismissal came just hours before a group of disgruntled shareholders was scheduled to meet in New York to discuss the company's performance.
Shaheen said that he will focus on maintaining and developing Siebel's current products, as well as engineering a range of front-office applications.
The firm wants to become a leading provider in the front-office market, which Shaheen claims has an estimated value of $100bn a year.
Siebel last year offered an on-demand solution similar to that of Salesforce.com, a company that is showing great success in the hosted CRM market and with mid-sized corporations. But Siebel has had little success in this space so far.
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