Siebel Systems’ third quarter 2004 earnings contrasted sharply with its loss-making year ago performance. The CRM player posted net income of $19 million and came in with a set of results at the upper end of the preliminary expectations divulged earlier this month.
Siebel Systems has posted its Q3 results.
Overall revenue was $317 million, with license revenue contributing $105 million and maintenance $118 million. Sales were down on the grim third quarter of 2003, but they were up on a sequential basis.
The bulk of its business came from additional investment by existing customers who added new functionality or new seats. Of the 296 transactions carried out during the quarter 212 were to add additional seats to existing users and 84 were new projects, which were a mixture of new areas for existing customers and some new customers. It now has a customer base of 4,000 organizations.
At its user conference last month Siebel played up its business intelligence line of business and this was a significant contributor to the positive results, with Siebel Business Analytics license revenue contributing $27.4 million to the license total, a 17% increase compared to Q2. It expanded the analytics offering during Q3 so this is a trend that is likely to continue as it feeds pent up demand among the existing customer base.
Siebel is looking at several areas for growth opportunities, with CEO Mike Lawrie previously saying that the company will both build and buy new applications. He has also created a dedicated SMB business division to enable Siebel to take advantage of increasing activity in this market sector, and to provide a channel to market for its On Demand offering. Most striking was its recent announcement that it would look to develop its custom application business.
This is a significant departure from past strategies and is based on research that indicates that a majority of organizations still rely on custom CRM solutions. Siebel is aiming to provide for custom needs based around standards-based software. It could also be an admission that the broad based suite vendors, SAP in particular, have got a firm hold on the CRM market and that Siebel is no longer able to compete and win head to head; it is therefore taking a parallel course.