Siebel weighs channel role for hosted CRM

Siebel Systems is weighing up the potential for greater channel involvement as it fights to retain its market share through the local launch of a hosted CRM offering.

Historically closed to the channel due to its focus on direct sales to the top end of town, Siebel was looking to extend further into the SME space with its CRM OnDemand hosted product, developed and marketed in a partnership with IBM.

First announced last year, CRM OnDemand was launched in the Asia-Pacific region this week, though a number of local firms have already been evaluating it, including Telstra's Sensis division.

While the vanilla version of the product would continue to be sold by in-house sales teams at the two companies, country manager Rob McGregor said he wouldn't rule out working with selected channel partners once vertical industry versions of the package are released.

Siebel planned to launch customised hosted packages for high-tech, insurance, automotive and life sciences this year, followed by communications, financial services, manufacturing and consumer goods in 2005.

'As the industry verticals flesh out, we will reach out to capitalise on specific industry skills in the channel,' McGregor said.

Outside verticals, however, there were limited opportunities. 'The nature of the product makes a traditional channel less valuable,' said Rich Reimer, group director for the OnDemand product, citing the elimination of hardware sales and maintenance requirements.

Another tricky issue in any channel deals would be revenue sharing, as Siebel already had to give a percentage of the CRM OnDemand fees (which start at $120 per user per month) to IBM. Officials declined to reveal details of those financial arrangements.

Research by Frost & Sullivan found that the hosted CRM market in Australia would be worth $6.5 million this year and rise to $35 million by 2007.

Siebel faces tough competition for that cash, with Salesforce.com, IBM and SAP among the firms clamouring for a slice of the low-end CRM pie.