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At its user conference last week, Siebel announced a multiyear global strategic alliance focusing on optimising Siebel e-business applications for the Microsoft .net platform.
But in what can be seen as a case of divided loyalties, Siebel also announced its commitment to Java reaffirming its partnership with Sun Microsystems. Siebel said the latest release of its eBusiness applications suite, supports the J2EE (Java 2.0 Enterprise Edition) connector architecture - a specification for integrating enterprise applications with the Java platform.
Gartner analyst Jeff Comport said Siebel's intentions were to embrace both platforms while continuing to promote its own servers software, but the implications of its alliance with Microsoft are generating the most interest.
It will involve a number of steps with Siebel supporting Microsoft's BizTalk and Visual Studio and optimising its packages for Windows Server operating systems, Microsoft SQL Server and the Microsoft .net framework for XML web services.
For Microsoft's part, it will provide support to Siebel's Universal Application Network, which aims at simplifying connections between products, including non-Siebel applications.
Microsoft chairman Bill Gates promised users the union would speed up their reaction to business change and give them a bigger return on investment.
Microsoft and Siebel: will the partnership work?
David Bradshaw, Ovum lead analyst CRM, is not convinced. "This alliance will have little practical value for users in the short term." He warned: "Redeveloping something as big as Siebel to .net is a massive undertaking. It will take years for the fruits to come through for a .net version of Siebel."
Although Microsoft and Siebel are investing heavily in the relationship with a joint sales force of about 100 people worldwide, Bradshaw believes "it is still a large-scale experiment".
He said it could pay off. "If you believe in the long term that [Microsoft's] Web services will give you scalability and robustness and, potentially, a simpler underlying architecture."
Erin Kinikin, Giga vice-president and research leader, enterprise applications, is more upbeat about Siebel's support of .net, believing it will be of benefit for many users.
"It signals the continuing role of the desktop in front office applications. Sales and marketing workers often spend their day in Word, Excel and Powerpoint, not backend transactions systems. Siebel's support for .net will make it easier to blend CRM with the Microsoft Office applications that front office people use," she said.
She added: "This should mean lower training costs over time and greater ability for the business user to help themselves instead of always relying on IT."
Siebel's independence moving forward
There are questions, however, over whether Siebel can keep both its Java and Microsoft partners happy - especially if the software giant decides it wants a bigger slice of the CRM software market and swallows its new partner in the process.
Although both companies brushed aside any possibility that Microsoft will acquire an equity stake, Siebel is under pressure. It posted its first quarterly loss since 1997 of $92.1m (£60m) this month and plans a major restructuring.
"Siebel will have the top end and Microsoft the bottom end of the CRM market, with a gentlemanly agreement about the midmarket, but precedents show 'co-opetition' might be a flawed concept," said Bradshaw.
Java or .net?
Siebel's choice of having multiple partners could make sense in context of its user base. "The vast majority of our customers are looking at deploying J2EE-based applications and Microsoft," said Siebel vice-president marketing EMEA Neil Morgan.
But who chooses what and when are vital factors, says Dharmesh Mistry, chief technology officer of Edge IPK, a CRM component vendor which works with both the .net and Java platforms.
"It will take a minimum of three years before .net is an enterprise solution, whereas Java is there now. It might be a good affordable platform for SMEs, but how much faith are enterprise users going to have in something not scaleable and proven?"
Edge IPK's CRM products run under .net and Java, but for now Mistry is recommending Java. "At least we know it scales," he said, ".net is not ready for the enterprise."