Siebel Systems has a reputation for being a tough negotiator on price but several attendees at Siebel’s CustomerWorld user conference last month say it’s possible to pay reasonable prices for Siebel software — and offered tips on how to negotiate these.
“Pricing was an obstacle,” says Robert Martens, director of global front-office technology at Ingersoll-Rand. “Initially, it was sticker shock — the published price is pretty high.”
With that in mind, Ingersoll-Rand initiated a series of dialogues with Siebel, he says. “It took some time for us to get them familiar with our business model [but] once they understood our direction and purpose, it was easy.”
A plus for Ingersoll-Rand is that it deploys both hosted and in-house Siebel software covering pricing, configuration and call centre applications. That allows divisions that can’t justify an expensive rollout to experiment with the hosted version of Siebel’s product, Siebel OnDemand, “without the CFO crashing down on them,” says Martens.
Historically, Siebel has had a take-no-prisoners attitude towards price negotiations, says Joshua Greenbaum, an analyst at Enterprise Applications Consulting. “If you wanted the best CRM, you had to pay for it,” he says.
At mail-sorting systems provider Pitney Bowes, Siebel licences are purchased at the corporate level, says William Geronimo, Pitney Bowes director of applications development for CRM information systems. The company runs Siebel’s customer service, call centre and sales force automation software.
When Pitney Bowes started rolling out Siebel applications five years ago, officials saved thousands of dollars by purchasing in volume and spreading the software throughout the enterprise, Geronimo says.
A business unit that wants access to the applications is responsible for buying its own hardware and consultancy services and paying its own infrastructure costs, he says.
Pitney Bowes also avoided buying too many licences, he says. “We had a good projection of what we needed and hit it about right.”
EDS found Siebel to be flexible during price negotiations, says EDS chief technology officer JR Jesson. EDS uses several Siebel applications, including customer order management and business analytics.
In its negotiations with Siebel, EDS used a “creative dialogue”, laying out both its long and short-term objectives, Jesson says. “EDS set the tone that we didn’t want a [single] sales event but rather an on-going, long-term relationship,” he says. “This has borne fruit beyond the deal. We are working closely with Siebel at both the marketing and technical levels.”
A Siebel spokesman suggests customers first consider the value provided by applications rather than simply the price. There are multiple elements involved in buying software and the licence fee is just one of them, he says.
Siebel recently introduced version 7.7 of its applications and this cuts down on the total cost of ownership, the spokesman says. Also, some users might find Siebel OnDemand more convenient and flexible in terms of pricing, he says.
“We’re not shoving a deployment model down someone’s throat,” he says.