Will Nexus save Siebel?

Siebel first began talking about its Nexus framework in 2003, but development work progressed fairly quietly. The initiative gained a higher profile after Shaheen took the CEO job from Mike Lawrie in April. With investors eager for a rapid turnaround that would justify Siebel's ouster of Lawrie less than a year into his tenure, Nexus is frequently cited by executives as an example of Siebel's investment in growth initiatives.

Siebel isn't yet publicly discussing most of the details around its Nexus product line, but analysts say the basic idea is sound.

"What Siebel has recognized is that they have a tremendous amount of internal knowledge and expertise in managing complex deployments," said Nucleus Research Inc. analyst Rebecca Wettemann. "There's a lot they can do in terms of best practices and knowledge. People are definitely looking for that."

"If you want to do a very specialized component application that needs some of the basic processes in CRM [software], this is an easy way to move forward," said Josh Greenbaum, an analyst who runs Enterprise Applications Consulting Inc. in Berkeley, California.

But Siebel isn't alone in pursuing a component-based, SOA software strategy. Every major applications vendor is doing likewise: Oracle Corp. has its Fusion plans; Microsoft calls its spin Project Green; and SAP AG speaks simply of the "business process platform," the next evolution of NetWeaver, which will underlie all of its application architecture by 2007. Meanwhile, IBM partners broadly with application vendors (including Siebel) while urging customers to adopt its own Websphere middleware layer.

In Greenbaum's view, a company like Siebel that focuses on one niche applications area -- even if it's a expansive one, like CRM -- is at a disadvantage competing with broader vendors.

"Customers are being pushed to make a platform decision, and every vendor is trying to look like they're the best platform," he said. "In an Oracle or SAP shop, both of them are duking it out, along with IBM and maybe Microsoft. If the bulk of [a user's] processes are not CRM-based, if they’re running supply-chain, finance, human resources, etc., then it might make more sense to look at the suite vendor's platform than to look at the CRM vendor."

Siebel's Schneider counters that Siebel's expertise extends beyond its own applications. "CRM is a big space, but the bottom line is, really, to be able to complete any transaction about a customer, you're probably going to have to go to another system," she said. "It’s increasingly important for TCO [total cost of ownership] to reduce integration costs. And we've been working hard with IBM, Microsoft, BEA and other partners on that."

Siebel has struggled before with attempts to crack the application-integration market. Its Universal Application Network (UAN) hub architecture never caught fire, and Siebel's UAN head, Nimish Mehta, recently defected to SAP.

Still, whether Nexus succeeds as a product offering, Nucleus's Wettemann thinks Siebel's customers benefit from the development work. As Siebel focuses on increasing its software's usability and usefulness, its customer satisfaction reports are getting better. "People have seen vast improvements in functionality in Siebel's platform," she said.