4 May 2004 Tom Siebel is to step down as CEO of Siebel Systems, the customer relationship management (CRM) software company he founded 11 years ago.
Siebel will remain chairman of the company and is expected to focus on strategic matters. The division of the CEO and chairman roles is also an attempt to fend off criticism of corporate governance at Siebel Systems, and follows the example of other technology companies such as Microsoft, Oracle and Dell.
Michael Lawrie, formerly senior vice president for sales and distribution at IBM will takeover. “We’re very, very pleased that our first choice for the job ultimately accepted,” said Tom Siebel. “We cannot imagine a more experienced or talented executive to assume the role.”
Siebel Systems still enjoys a big market share lead in the CRM field, but has suffered from cautious IT spending in recent years, with licence revenue dropping by 70%. Its dominance is being challenged by software giant SAP and younger upstarts such as Salesforce.com, which provides its services over the Internet.
Lawrie’s appointment reflects the close relationship Siebel has with IBM, both as a customer and in terms of a shared ‘On Demand’ strategy. The two companies have also partnered to offer online CRM in the last year. As such, Lawrie’s appointment is expected to focus the company on web services to meet the Salesforce.com challenge. This will not involve a dramatic change of direction. “The intention is to stay with the same team, strategy and game plan,” said Lawrie.
Tom Siebel said that he decided to separate the CEO and chairman positions a year ago and will continue to take an active role in the company, in which he still holds an 11% share. Observers have noted that while his character was suited to the rapid growth of the boom years, his enthusiasm has waned as the company struggled with layoffs and cost-cutting.
The US Securities and Exchange Commission (SEC) has also kept a close eye on Siebel Systems in recent years. It fined Siebel $250,000 in November 2002 for infringing rules on selective disclosure of material information and investigated remarks made by executives at a dinner in April 2003 and an investor conference in 2002. In 2003, Siebel surrendered some $56 million of stock options after the company was criticised for his high levels of stock compensation.