Siebel Installs Shaheen as CEO

Major shakeups have taken place at Siebel this week. Just days after the company warned quarterly sales would be the lowest in five years, shareholders pulled the plug on Chief Executive Michael Lawrie's short-lived tenure and appointed George Shaheen as his successor.

"The board determined that a change was necessary," said Tom Siebel, chairman of the board and company founder, in a conference call. "Results over the last four quarters, in general, did not meet investor expectations and they did not meet our internal expectations. The board did a very thorough review."

Service-Driven Strategy

Industry watchers were only halfway surprised by the news. Yankee Group analyst Sheryl Kingstone told CRMBuyer that most observers figured changes were coming down the pike when company executives started talking about "execution issues."

"With the new services-driven angle, the board's decision to replace Lawrie certainly makes sense," Kingstone said. "I want to hear more about what this new CEO is going to do for Siebel's future custom-build initiative. That's a huge initiative for them. It's a very large market opportunity."

Accenture Ties

Shaheen will take the helm immediately. The 60-year-old former CEO of Anderson Consulting (now Accenture) has been a member of Siebel's board since 1995. In his 10 years as CEO of Andersen, Shaheen drove revenue from US$1 billion to more than $9 billion.

"George is the logical choice to take Siebel Systems to the next level of success and deliver strong and consistent results," Siebel said. "George is a seasoned executive who knows our industry well. He has a proven track record of leadership."

Siebel for Sale?

The rumor mill has been churning about Siebel. The latest speculation is that Siebel will go up for sale. But Kingstone said there is no perfect suitor for the business software company. IBM (NYSE: IBM), she said, is not looking to get into the applications market and most of Siebel's customers are on the Unix platform, making it a mismatch for Microsoft (Nasdaq: MSFT).

But analysts said an acquisition would not fix Siebel's revenue stream anyway.

"The only thing that's really going to fix Siebel today is execution on closing those deals," Kingstone said. "Coming up with an architecture that lowers total cost of ownership, communicating to their customers that it isn't a monolithic inflexible application, and that they can live in an ecosystem of best of breed."

Shaheen Speaks

Shaheen said he is enthusiastic about the challenge. He believes Siebel has all the ingredients it needs to succeed and said he intends to "focus relentlessly on execution."

"The front office market opportunity is huge -- estimated at $100 billion a year -- and still largely untapped," he said. "We have the people, the product leadership and the customer delivery vision to capture it, and now we need to be unrelenting in our focus on execution. I look forward to working closely with the entire senior management team and the Board to get the job done."