Microsoft and Siebel reaffirm ties

The rumours circulating recently that Siebel Systems was to be bought outright by Microsoft Corp. proved completely false Monday as the two companies instead announced yet another partnership agreement.

Siebel’s Integrated Business Processes can now be implemented on the Universal Application Network (UAN), a new business process touted by the company’s CEO Thomas Siebel. It will be included in Microsoft’s next BizTalk Server, called Jupiter, as well as Visual Studio .Net design tools. Siebel’s eBusiness applications will be optimized for the Windows operating systems, Microsoft SQL and the .Net framework.

In his explanation, Siebel said the UAN addresses “the challenges of application integration.” He cited General Motors as an example of an organization which had 5,000 applications with 25 million connections to be completed. The UAN was used to connect the applications. In fact, Siebel said he couldn’t believe customers have not revolted because this hasn’t been possible – until now, of course.

“We have failed the customer and I’m surprised there hasn’t been more outrage,” he said.

Sharing the stage with Siebel at the companies’ announcement in Los Angeles was Microsoft’s chief software architect Bill Gates, who reaffirmed the software giant’s dedication to Web services “at the heart of Microsoft’s products.”

To the Siebel side of the announcement, Gates said, “We see an opportunity between structured and unstructured information based on integration.”

The relationship between the two software organizations dates back to the mid 1990s when Siebel was clearly the CRM market leader. Siebel said that the two companies had combined for a total of 1,200 partnerships leading to this one.

However, as its position to the throne is being hotly contested, the company needs to pursue new avenues. The strategic relationship comes at a time when analysts have said that Siebel is losing market share to other CRM vendors like PeopleSoft and SAP.

“It’s a Web services play (and) it makes sense for Siebel to be seeking a partner,” said Alister Sutherland, director of software research at International Data Corp. in Toronto. He added that the CRM market is facing challenges on two fronts: competition and soft spending.