Case Study

History

During most of the 1990’s and 2000’s, Siebel Systems, Inc. (Siebel) stood out as one of the pioneer and leader of the high-tech software industry. The company was founded in 1993 and grew to become the world’s largest provider of customer relationship management (CRM) software. From 1995 through 2000, Siebel was the fastest-growing company in the history of the software industry. They achieved incredible growth in the early ‘90s and became an industry leader in the business software market (Siebel, 2001. p.1) But the economy took a sudden downturn in 2001 and so did the growth and profit of Siebel. Tom Siebel, the company’s founder and president was quoted as saying that this downturn was only temporary and that the economic recession would only hurt his “dilettante” competitors (Kerstetter, 2003). Much to his disappointment it did not turn out that way for Mr. Siebel and his company.

From the time it was founded in 1993, the company grew quickly. With the help of the technical industry explosion in the late 1990s, Siebel was the fastest growing company in the country. Siebel filled a void in the market and its success was largely due to its formed alliances and acquisitions to provide solutions to its customers. Siebel's success can be attributed to its ability to form relationships with other companies in the industry. However, its downfall was more than a slumping economy. It was also not listening to its customers’ complaints, being overly optimistic to the point of almost arrogance, and underestimated their competitors who were not just “dilettantes” but they were studious, earnest and hungry. Siebel did great in the beginning but its revenue dropped to $1.6 billion and continued to slide to its downfall. Siebel was a company with considerable strengths at one time, but with many problems that its management was unable to address. In addition to the economy, Siebel has had to deal with intense competition and customer dissatisfaction...