Siebel Versus SAP
Your ears are probably still ringing from the roar of disbelief that went up when CRM vendors announced their fourth-quarter figures, with SAP AG rather than Siebel Systems Inc. claiming the biggest share of the CRM market.
In corporate earnings statements, Siebel declared that its CRM license revenues for the quarter came in at just over $157 million. SAP, meanwhile, indicated that its CRM license revenues totaled euro205 million (roughly $220 million), which some have heralded as the end of Siebel's market dominance.
SAP's math has come under fire, however, because rather than declaring the specific products that comprise its CRM revenue, SAP assigns a percentage of suite sales revenue to different categories based on usage statistics provided through customer surveys. There is no credible doubt that SAP has solidly established itself as a legitimate solution provider, however. "The reality is that SAP is taking market share from Siebel, and there's no way anyone can deny that," says Rod Johnson, vice president at AMR Research. "They have from fifteen hundred to two thousand CRM clients, and a huge amount of [installed SAP customers] left to continue to grow the CRM business."
The debate over the numbers quickly devolves into a "What is CRM?" shouting match. Critics of SAP's numbers point out that functions it once would have reported as ERP processes are being lumped under the CRM column traditionally bounded by the sales-marketing-service triad. Peel back the layers at Siebel, however, and it becomes apparent that revenues from products like ERM also fit poorly into the traditional CRM definition. The ensuing debate has some in the industry squirming around the question of declaring either SAP or Siebel to be the true leader, regardless of which interpretation of the numbers they support, which should prove interesting if and when Siebel or another firm starts declaring CRM revenues in excess of SAP's numbers in an upcoming quarter.
"The data's too questionable, and they [SAP] haven't told me exactly what's in that [CRM license revenue] definition," says Sheryl Kingstone, CRM program manager with the Yankee Group. She considers the more important message to be that back-office decision making processes have and will affect CRM implementation strategies, and expects the form and function of a company's approach to ERP problems to steer 60 percent of CRM purchases going forward.
It's important to keep in perspective that regardless of the math and magic behind them, these are just two numbers that have scarcely anything at all to do with actual CRM strategies. "The only two people that really care about this are [Siebel CEO] Tom Siebel and [SAP CEO] Hasso Plattner," Johnson says.