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It is always dangerous for market leaders to dismiss new competitive threats. And that was something that Siebel Systems was having to accept in October as it forced down hefty portions of humble pie.

Back in June 2001, the dominant force in customer relationship management software closed its Sales.com subsidiary, an application service provider (ASP) that delivered sales force automation (SFA) software as a service over the Internet. At the time, founder Tom Siebel suggested that Salesforce.com, the pioneering ASP on which Sales.com was modelled, would follow it into oblivion within a year.

But Siebel misread the market. Over the past two years, as business at the company has gone into sharp decline, revenues at Salesforce.com have been doubling, putting it on target for $110 million this year, and user numbers have surged to 110,000 spread across 7,800 customers. In October 2003, Siebel decided it could ignore the threat no longer.

First, it announced a new ASP service for some of its core products, badged Siebel OnDemand, then two weeks later came the news that it was buying Salesforce.com's closest rival UpShot.

Do those two seemingly unconnected initiatives suggest a lack of coordination or even panic? Not at all, says Ken Rudin, vice president and general manager of Siebel's OnDemand product line. He suggests that the moves follow a long established pattern at Siebel of launching new products and quickly following that up with a major acquisition in the area.

"What we get with the UpShot acquisition are more than 100 people who have been working in this market. They can give us operational experience, product experience, sales and marketing experience, and so help increase our domain knowledge," says Rudin.

The plan is to integrate some key UpShot technologies into Siebel OnDemand and migrate UpShot users over to that when it is finally launched at the end of the year. Nevertheless, Rudin promises that Siebel will support UpShot users indefinitely, pointing to how its still supports Scopus call centre software users almost five years after it acquired the company.

Siebel's newfound appetite for acquisitions showed itself elsewhere in the month. Its target this time, Motiva, was an early leader in compensation management software for managing salesforce commissions, bonuses and perks.

But the sale of Motiva's assets for a knock-down price - reportedly just $3 million - suggests that the market for such niche software was far from booming, and that its backers had finally decided to cut their losses after having poured in more than $25 million in funding.

That and the other deals in October, however, were dwarfed by the M&A activity of storage systems maker EMC. Having closed its acquisition of back-up software specialist Legato, the company launched a $1.7 billion agreed bid for document management software supplier Documentum.

The purchases are both part of EMC's drive to build major software portfolio around the concept of 'total information lifecycle management', a strategy for managing unstructured content from creation and use, through to archiving and disposal.

But whatever the high-level strategic justification, the deal nevertheless mystified analysts, several of whom questioned the synergy between the two. "EMC is a storage vendor that has no history of content or document management," said Alan Pelz-Sharpe from technology market research house Ovum. And Brian Babineau at the Enterprise Storage Group described the move as a "calculated risk", adding "the customer benefit and the one-plus-one-equals-three argument are still a long way off."