05 March 2003 Customer relationship management giant Siebel Systems has announced that it is to discontinue support for the Janna Systems financial services software package it acquired in 2000 – putting it at risk of losing some major customers in that sector.
Siebel acquired Janna Systems in September 2000 for $1.1 billion. The company specialises in CRM for the insurance, investment banking and equity investment companies. Its customers included investment banks Merrill Lynch and Lehman Brothers.
According to Siebel executives, fewer than 40 of Siebel’s 3,500 customers are using the version of the application it plans to phase out, and Siebel has integrated many of the features of the Janna Systems package into its own financial services CRM product.
However, only ten Janna customers have migrated to Siebel’s financial services CRM package, despite the fact that Siebel offers free tools to move from one system to the other and charges no additional licence fees to upgrade from the Janna system.
Consequently, Siebel’s competitors in the financial services industry are beginning to circle these customers. One company, Oak Brook, Illinois-based Interface Software, has launched a ‘migration service’ aimed at coaxing the Janna users to switch to its Interface system.
The decision to discontinue support of the Janna system also raises questions about Siebel’s strategy to move aggressively into a number of key vertical industries.
When Siebel acquired Janna in 2000, it eliminated a fierce competitor in financial services and gained between 40 and 50 new customers. Given that so few of those customers are migrating to the Siebel financial services package, it may have to rethink how it targets customers in this lucrative sector.