Siebel v Salesforce — Lessons from the Death of a Tech Goliath

Bruce Cleveland

General Partner


Yesterday, posted an article I had been contemplating writing for several years.

It was a point of view story on the collapse of Siebel Systems and the rise of Salesforce to become the global leader in CRM. Well, at least a large portion of the CRM market.

In case you didn’t see the Fortune article, click here to read it. When you have finished, come back and the following narrative might add some color as they had to edit down the original and it lost a few points I had wanted to make.

Ok. You are back.

So, why did I write the article?

Tom Siebel built one of the most incredible technology companies and recruited some of the best people I have ever worked with. Many of those people have gone on to do some great things, not the least of which is to occupy senior roles at Salesforce – taking with them the lessons learned while they were at Siebel.

I felt someone needed to set the record straight in honor of all those former Siebel employee contributions. Since I was there as part of the inner Siebel senior executive circle, and still working, I was the most likely candidate to do it.

Fortune was kind enough to print it.

On the whole, I received positive feedback for writing the article. I didn’t run it by Tom in advance and I don’t even know if he’s read it. I do know one thing, he never would have written or authorized it because that isn’t the type of person he is. He has moved on and is doing some great things with his new company, C3 Energy.

So, now that the article has had a chance to be read and commented on, I want to make a couple additional points.

If you read the comments below the Fortune article — you have to scroll down to see them — one person didn’t  seem to internalize some points I tried to make. He essentially restated that, of course, it was a David v Goliath story and Salesforce crushed Siebel.

So, I would like to offer up the following logic flow and see if you either agree with him/myth or with my conclusions.

Fact: While Siebel started out as an enterprise SFA solution, by 2000 the majority (70%) of its revenues were from its Call Center product line.

Ask yourself, when did Salesforce deliver its first Call Center product – Service Cloud – into the market? Answer: 2010.

When was Siebel acquired by Oracle? Answer: 2006.

So, in 2006, if the majority of Siebel’s revenue came from its Call Center product line and Salesforce didn’t have a Call Center offering until 2010, how could Salesforce have had much, if anything, to do with Siebel’s demise? Answer: It didn’t.

I have provided the facts. It is up to you to decide whether to accept them or not.

To be clear, the point of my article wasn’t to take away anything Salesforce has done. It has revolutionized the way in which software is developed and delivered. It has continued to grow year after year generating significant shareholder returns (full disclosure: I own shares of Salesforce in my personal portfolio). So, if that is what you read into the story, I missed the mark.

I do want to end by thanking all the former Siebel employees for their contributions in helping to make Siebel the success it became and for the great work experience I had from 1996-2006.

Like Tom, I am now on to other things. I have said my piece.

Sep 01, 2015