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By Munir Kotadia, 3 December 2003 08:50

NEWS BT and Siebel Systems have expanded their six-year partnership so the telco will be able to resell the business application company's OnDemand customer relationship management service to small and medium-sized businesses.

OnDemand is a web-based product that is licensed to companies on a per user, per month basis, which means users can deploy their CRM solution without having to manage the hardware or software that is traditionally associated with business applications. Siebel's OnDemand is essentially a rebranded version of a CRM package made by Upshot, a company that was acquired by Siebel in October 2003. UpShot was a direct competitor with Salesforce.com, which has been successfully taking customers away from traditional CRM companies since being established in 1999.

BT said it will host the CRM service for small businesses through its Siebel-based Contact Central arm, which already offers web-based applications.

Paul White, director of BT Contact Central, said BT and Siebel will be competing directly against Salesforce.com, but he also expected to come up against IBM, another of Siebel's major OnDemand resellers. "Yes, I think you will find that they [Salesforce.com] have a similar offering and I'm sure there will be times when we will see IBM in this market place, but we have got an offering that is clearly differentiated - if customers want a permanent solution, they can have one and if they want an on-demand solution, we can provide that too," he said.

Phill Robinson, vice-president of European marketing at Salesforce.com, was trenchant in his criticism: "Siebel's channel strategy is a dog's breakfast and always will be a dog's breakfast. They launched Siebel OnDemand two months ago with IBM - when it wasn't available, and still isn't available - now they have launched it with BT, so they have set up two of their key partners to compete with each other in the UK marketplace," he said.

White said that although the service is not expected to be "mass released" until the middle of February 2004, the first beta customers would be testing the product before the end of this year.

White told silicon.com sister site ZDNet UK that BT already has more than 60 Contact Central customers, so the deal was a "natural extension of our relationship".

Munir Kotadia writes for ZDNet UK