21 October 2002 Microsoft chairman Bill Gates and Siebel CEO Tom Siebel have unveiled an alliance that will see the customer relationship management (CRM) software vendor throwing its weight behind Microsoft’s .Net web services and development platform. The alliance was announced on the first day of Siebel’s annual user conference in Los Angeles.
The two companies have agreed a three-year deal valued at $250 million (€256.8m). This will involve a joint investment and a five-year product roadmap whereby Siebel and software giant Microsoft will release products simultaneously.
In addition, more than 100 dedicated Microsoft engineers will be posted to Siebel’s headquarters in San Mateo, California with the same number of Siebel engineers going to Microsoft’s Redmond, Washington State campus in exchange.
“This will change the dynamics of the application software industry indelibly for the next five years,” Tom Siebel told attendees. The announcement ends days of speculation over Siebel’s relationship with Microsoft, which had led some analysts to suggest that Microsoft was mulling the idea of taking a stake in the CRM software vendor.
Under the agreement, Siebel must ensure that its products offer complete support for Microsoft’s .Net platform and its new development environment, Visual Studio.Net.
Siebel also plans to support the Java 2 Enterprise Edition (J2EE) environment, but to a lesser extent. Siebel is the first major enterprise application vendor to endorse .Net, so the alliance is crucial to Microsoft to help it showcase the capabilities of the platform.
One of the key elements of the Siebel/Microsoft relationship is Microsoft’s involvement in Siebel’s Universal Application Network (UAN), an integration architecture that will begin shipping before the end of the month.
UAN – a library of pre-configured business processes built by Siebel that allows users to automatically link different enterprise applications involved in each process – will use Microsoft’s BizTalk Server as its integration server technology.
By 2004, according to the roadmap, Siebel will be fully integrated not only with Microsoft’s .Net and integration platforms, but also with its flagship Office suite and mobile platforms. Microsoft foresees Office providing a vital desk-top component to its web services strategy, particularly the Excel spreadsheet component.
However, for users Siebel’s ringing endorsement of Microsoft’s .Net platform could leave them with a dilemma. A significant number of other enterprise applications vendors, including PeopleSoft, JD Edwards and SAP – all bigger than Siebel – have already standardised their suites on J2EE. Many organisations are likely to base their enterprise architecture on one standard or the other, to avoid costly integration issues.
Furthermore, .Net restricts organisations to basing their applications on Microsoft’s Windows server operating system family, whereas J2EE allows customers to use a combination of operating systems, including Unix, Linux and Windows.