Siebel and SeeBeyond are launching a European demonstration center to showcase Siebel's Universal Application Network....
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The center is designed to let prospective customers view a real-time demonstration running end-to-end business processes across Siebel eBusiness Applications, SAP R/3, custom-built warehouse management systems, Oracle's Transportation Management system and legacy IBM OS/390 systems. The facility is located at SeeBeyond's European headquarters in Bracknell, UK, with additional demonstration centers planned for the second half of the year in Paris and Frankfurt.
Context: SeeBeyond claims it already has a lot of customers in common with Siebel – Kate Mitchell, senior VP of marketing and business development for SeeBeyond, told us they had 40 customers and 60 joint implementations.
The new center is designed to enable existing customers to understand what is compelling about the Universal Application Network in a working environment, and to show CEOs and COOs the benefits to be accrued from business process management. Both Siebel and SeeBeyond are hoping the center will help them more deeply penetrate existing customer accounts and attract new customers.
In the midst of a weak IT spending environment, sales execution is increasingly becoming a key differentiator in a very competitive integration software market. We believe SeeBeyond has one of the more aggressive sales strategies, and the demonstration center is a further example of SeeBeyond's efforts to penetrate vertical markets in the future.
Competition: SeeBeyond faces stiff competition from IBM, Tibco, Vitria and webMethods, all of which are tweaking their own products to cater to the business processes defined in Siebel's library. Siebel says it will take three to six months for up to 200 processes to be defined and built into the various integration servers.
Siebel's Universal Application Network architecture calls for an integration server component that coordinates the communications between Siebel and other applications and systems. Siebel says it is willing to work with all five of the EAI vendors, but privately it has admitted it will actively go to market with offerings from two or maybe three vendors at most.
SeeBeyond's eGate Integrator provides a robust and scalable infrastructure for executing the standards-based business processes delivered by Universal Application Network. The company's software stack also includes some spiffy business process management (BPM) workflow functionality that it hopes with turn existing and prospective customers' heads.
SeeBeyond's stiffest competition will come from IBM. Big Blue is upgrading its CrossWorlds InterChange Server to become the component that links Web services-based business processes that encompass Siebel applications and other external systems. CrossWorlds' presence in SAP accounts, especially within manufacturing industries, will help persuade many Siebel customers that IBM is the best choice as the integration server. IBM is Siebel's largest and most strategic partner, and it is likely that the vast majority of any Universal Application Network customers will be joint IBM-Siebel customers – this would provide the quickest way to demonstrate the initiative's viability.
Business model: In addition to getting paid for server licenses, integration vendors hope that by being part of Siebel's Universal Application Network they can sell additional software components to Siebel customers.
The announcement comes at a time when spending conditions within the enterprise are showing little sign of improvement from Q1, and when the potential recovery in IT spending is looking as though it will come much later in the year (Q4), rather than early in the second half as originally thought.
Integration vendors are finding the environment particularly challenging. The complexity and cost often associated with application integration software means that deals are often larger in size and the technology offers slower return on investment (ROI) than other software sectors.
While the word from enterprises and systems integrators is that EAI software remains a priority and strategic focus for many businesses going forward, it is the technology's complexity and implementation costs that have made it challenging for leading pure-play vendors like Tibco, Vitria, webMethods and SeeBeyond.
Those integration vendors with a diversified customer focus and some new areas of strength, like the government sector, can expect to survive the current downturn.
It is an important point, and one that Mitchell raised. SeeBeyond has been working to make inroads in nontraditional sectors like consumer packaged goods and retail. Retek provides retail application software, including CRM, merchandising, supply chain management and logistics. SeeBeyond has embedded its software in Retek's retail packages. Not only does this help SeeBeyond make progress in vertical markets, it should also help the company leverage those verticals with a more ubiquitous, horizontal software stack in the future.
Conclusion: SeeBeyond is gaining traction and penetration within vertical industries. It has one eye over its shoulder as it prepares for the notion of industry crossover. SeeBeyond thinks we are at the point where large industries want to trade across boundaries. The EAI/B2Bi/BPM software landscape continues to change rapidly. Expect additional vertical industry announcements from SeeBeyond over the coming months.
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