Sunday, April 21, 2002

Siebel: Back to the Future

Back in January, I linked to a Forbes article that indicated Tom Siebel believed the recession was over. In fact, he said, “I believe we will see the information technology market pick up in Q1 and Q2 and the economy at large by Q3 or Q4.” (How’d he know? He uses his own software, of course.)

Which makes Siebel’s tough quarter seem all the more ironic. In this week’s eWeek, Dennis Callaghan reports that a number of CRM vendors took it on the chin in Q1. (Full disclosure: I work for Interface Software, a CRM company focused on the professional services market. We had a great quarter. I’ll link to the press release when it hits.) Q1 sales for Siebel cratered ($477m vs. $598m in Q1 ’01), and were even lower than Q4. Don’t get me wrong – to do nearly a half billion in software revenues in this economy ain’t bad. But when you’re expected to do better, well, you need to manage the expectations better. Betting the farm that your software can read tea leaves isn’t a good way to get the analysts on your side.

In the quarterly conference call with analysts, Tom Siebel admitted: “I suspect that this will have been for the industry one of the worst quarters ever. … It’s pretty darn weak out there.” So what should we conclude: that the software was wrong, or that Tom read it wrong?

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