Look Out, Siebel, as Net-native and Client-Server Capabilities Converge

If you’re having trouble deciding between an online CRM solution and a client-server application, relax. Bob Chatham, a Forrester Research principal analyst, predicts that in three years there won’t be much to decide between other than price. Chatham believes that such net-native sales force automation (SFA) applications as those offered by salesforce.com and UpShot spell trouble for Siebel. Client-server solutions like Siebel’s offer such advantages as significant offline activity, call center integration and complex customization and security, but Chatham says eCRM solutions soon will be equally robust. When that happens, he advises Siebel and other large client-server-only CRM companies to beware.

Already, net-native applications offer several advantages over their client-server brethren. Total cost of ownership (TCO), for instance, is cut roughly in half – a critical advantage in these tough economic times. Over a three-year period, Forrester estimates eCRM apps cost an average of $1,306 per user per year versus $2,532 for a licensed, self-hosted client-server app. Plus installation is far quicker – days, instead of months or years. As one UpShot customer explained, “For us the choice was a deployment issue. I set up an entire national forecasting system on a Saturday. It’s so easy that people enter data unprompted.”

Other advantages to a net-native application, says Chatham, include minimal implementation risk, simple integration today with strong visions for the future and the ability to scale to hundreds or thousands of users. And as these applications continue to strengthen, they eventually will reshape the whole CRM market. “Within three years, net-native and client-server functionality will converge,” Chatham says. “The difference then boils down to economics, tipping the TCO calculation in favor of net-native apps.” Since Siebel in June shut down its own net-based application, Sales.com, the CRM powerhouse needs to find another way to address the net-based threat head-on, says Chatham, or the company could be in trouble. “Siebel must climb back into the ring with its own offering – before salesforce.com and UpShot mature enough to begin eating into Siebel’s high-margin enterprise apps business,” he warns.