'Gates? What do you mean you booked Gates?'

NEWS By Alorie Gilbert Siebel Systems has booked Bill Gates as keynote speaker at its customer conference next month - a move that has raised some eyebrows to say the least. Most software companies would no sooner welcome Microsoft into their market than court an investigation by the Securities and Exchange Commission. But Gates will address a throng of Siebel customers at its User Week 2002 in Los Angeles on 21 October. Extra spice will be added to the encounter by news that Microsoft is about to launch an offensive on Siebel's dominant position in the CRM market. Siebel is the leader in the $11.3bn market for customer relationship management (CRM) software, which helps companies track sales, marketing and customer service activities. But even as Gates delivers his address, his product developers will be putting the finishing touches on Microsoft's own CRM software, set to debut later this year. The companies downplay talk of any rivalry, and insist that their respective products appeal to different spectrums of the market. Siebel sells to the very largest companies in the world, including Ford, Boeing and AT&T. Microsoft plans to market CRM applications to companies with 500 employees or fewer. Siebel's choice of Gates as a keynote speaker boils down to his star status, said a Siebel executive. "Bill Gates is an industry icon with a huge draw," said George Ahn, general manager of Siebel sales. "I'm delighted we got Bill." Despite the feel-good comments, analysts say the companies are on a collision course. Siebel is reaching out to smaller companies. It has a division, led by Ahn, dedicated to selling Siebel applications to companies with fewer than 1,000 employees. And Microsoft isn't known for being content with a narrow section of any market in which it competes. "It's a curious mix," said Josh Greenbaum, an analyst at Enterprise Applications Consulting. "These two guys are competitors. Siebel doesn't make a compelling case for .Net, and .Net doesn't make a great case for Siebel. Makes you wonder what Gates is doing there." Some see Gates' appearance at the conference as a political gesture intended to ease tensions. "It's an effort to reassure Siebel that Siebel is important to Microsoft and that Microsoft doesn't intend to compete with Siebel," said Matt Rosoff, an analyst at Directions on Microsoft, a Microsoft watchdog. Microsoft is eager to recruit software makers, including Siebel, to support its forthcoming set of .Net products, the makings of a software infrastructure on which business applications like Siebel's could run. Siebel wants to remain in the good graces of Microsoft to ensure that its applications work with the latest versions of Microsoft databases and development tools. In a sense, Microsoft is the lesser of two evils: It offers SQL Server, an alternative to databases from market leader Oracle, which is a more direct competitor to Siebel in the CRM market. "Even without the resale relationship for CRM, Microsoft is an important Siebel supplier and Siebel is an important proof-point for Microsoft's 'enterprise' aspirations," said Kinikin. Alorie Gilbert writes for News.com