TDWI | Training & Research | Business Intelligence, Analytics, Big Data, Data Warehousing

Siebel’s Analytics Push

As the major enterprise application vendors flesh out their analytic offerings, Siebel is in the forefront

• By Stephen Swoyer
• February 2, 2005

For a long time, packaged analytics have been a tough sell, largely because they almost always required a high degree of customization. As a result, most customers opted to build their own analytic solutions. This trend could be changing, however, as the major enterprise application vendors continue to flesh out their own analytic offerings. One vendor in particular has made significant progress in this regard: CRM giant Siebel Systems Inc.

At its inaugural Business Intelligence Forum, Siebel systems late last year announced several new analytic applications, based on its customer-centric data warehouse.

What’s more, Siebel officials signaled a new willingness to compete in the business intelligence space. “This is the first time in my professional career where the importance of BI has become really top of the CIO agenda,” said Larry Barbetta, group vice president and general manager of Siebel’s Business Analytics division, during the event. Barbetta said Siebel was committed to developing a “new generation of business intelligence” applications.

On the analytics front, Siebel kicked things off four years ago when it purchased analytics pure-play nQuire. Since then, notes Kurt Schlegel, a senior program director with consultancy META Group, the CRM giant has significantly enhanced its analytics capabilities. “Siebel has put together a scalable, database-independent platform for building business intelligence solutions coupled with a series of packaged analytical applications,” he writes. “Although Siebel’s BI platform can be used to build solutions from scratch, the heart of its analytics strategy is to provide packaged applications that ship with a predefined data extraction layer, data/metadata model, and business content.”

What’s more, Schlegel notes, Siebel’s strategy has bucked the industry trend: While some competitors (such as Informatica Corp.) have prominently exited the pre-packaged analytics market, citing persistent revenue shortfalls, META Group estimates that Siebel has consistently grown its analytic revenues—from $20 to $25 million in 2001 to $115 million last year. To put this in perspective, customer analytic applications—i.e., sales, marketing, and service analytics—accounted for one percent of Siebel’s license revenues in 2001; by early last year, sales of analytic software accounted for one-quarter of Siebel’s license revenue.

Siebel’s strategy has been successful, Schlegel says, because it takes into account the historical reasons why pre-packaged analytics offerings have failed. “Traditionally, large enterprises have eschewed prepackaged analytical applications because they required extensive customizations. However, our research indicates large enterprises often prefer packaged analytical applications when certain conditions are met. First, predefined ETL scripts must support most of the required data sources. Second, the business intelligence must be provided in a format relevant to a particular industry.”

In this respect, Schlegel says, Siebel provides a “reasonable” number of data scripts—for common enterprise application software such as SAP, Oracle, and PeopleSoft, that is—but customers should still expect to do some coding, preferably by exploiting Siebel’s universal business adapters.

As for providing analytics custom-tailored for specific industries, Schlegel says Siebel has been surprisingly accommodating. “Siebel has integrated its analytical applications for more than 20 specific verticals,” he writes, noting that the company has delivered vertical solutions for existing applications like sales, service, and marketing. But for other target verticals—including HR, finance, and supply chain solutions—customers must wait for Siebel and IBM Business Consulting Services to do the necessary integration work. “We expect the first of these to be deployed in the next few months,” Schlegel adds.

Elsewhere, Siebel is well positioned to capitalize on another emerging business intelligence trend—that of applying analytical insights directly to business processes. “Siebel is well suited to do this in the CRM world, but Siebel does not own the business process for these other domains” such as finance, HR, or the supply chain. “The rise of composite application development within a portal framework will make it easier for Siebel and the independent BI vendors to apply analytical insights directly to an operational application.”

At the same time, he cautions, companies that are heavily vested in competitive ERP solutions will probably resist Siebel’s analytics push—at least for non-CRM domains.