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Siebel Systems Inc. on Tuesday launched a new plan of attack to go after the SMB (small to midsized business) space that has proved elusive for the market-leading enterprise CRM software developer.

The strategy includes a new go-to-market model that integrates direct sales with local and regional channel partners and a new partner alliance program for application development that specifically targets the SMB base.

Siebel CEO Mike Lawrie had vowed to go after the SMB space like never before shortly after he became the company’s new CEO earlier this year. The new effort is similar to the SMB channel program that Lawrie’s former employer, IBM, developed in the late 1990s.

“We think small to medium businesses offer substantial opportunity for Siebel Systems to participate and help to reignite our growth engine as we go forward,” Lawrie said in a news conference Tuesday in San Francisco. “Small to medium businesses are making as significant an investment in the front office as larger institutions.”

Siebel, which has relied heavily on direct sales since its inception, has built a new channel program including a separate sales and support organization for the SMB space. SMB sales representatives, known as territory managers, will work closely with channel partners to develop joint business plans for reaching the market on a regional basis. Siebel hired 70 such people in the third quarter.

Leads will be shared with partners, and channel partners will get access to the same training and materials as Siebel’s own sales reps and will be expected to work as teams with Siebel’s internal sales teams.

“Sixty percent of SMBs prefer to do business with somebody local in their region, who does the education, training and support,” said Bruce Cleveland, senior vice president and general manager of OnDemand and SMB at Siebel and the company’s point man on this new initiative.

“We’ve put together a program that embraces those partnerships.” Cleveland developed Siebel’s original Siebel Alliance Program seven years ago in his first stint with the company. He rejoined the company after Lawrie became CEO.

Click here to read about Siebel’s hosted, vertical CRM.

Cleveland said the new program also would eliminate channel conflict, which he described as one of the largest impediments to enterprise software companies selling to the SMB space.

“We’ll link together resellers with our salespeople, we’ll sell with and sell through, so that the right behavior is executed in the marketplace,” he said.

Cleveland said that over time, the sell-through component would become larger and larger.

“We along with our partners can deliver tangible business value,” Lawrie said. “We’re going after a different go-to-market strategy and distribution model, we’re actively embracing a new ecosystem and partner community. We’ll launch many new products and continue to advance our existing product offerings.”

Next Page: Changing the way Siebel does business.

Lawrie said Siebel also would change the way it does business contracts and proposals and the way it processes orders, to offer a more simple and efficient process better suited to the SMB space than to large enterprises.

“This is a significant opportunity for Siebel Systems,” he said.

Siebel’s relationship with IBM has been extended, with Siebel CRM OnDemand—a hosted offering Siebel developed with IBM—becoming part of the IBM Express offerings.

Siebel also announced an SMB Alliance Program with more than 250 member companies, who will have access to open APIs to speed development of integrated partner solutions, along with a tool kit and support.

The partner program, targeted to customer companies with as much as $500 million in annual revenue, includes both the Siebel CRM OnDemand hosted service and the Siebel CRM Professional Edition on-premise application suite.

“It’s a lot of companies nobody has heard of before, but these particular partners offer unique capabilities and services that are in high demand in the SMB marketplace,” Cleveland said.

He added that all partner solutions would be tested and validated by Siebel.

“It’s OK to provide an open framework, but the issue is has that been validated, so the testing and validating is not outsourced to the customer,” he said. “This will create some brand-new types of technologies and applications that haven’t been available in the past.”

Siebel is turning the spotlight on business intelligence. Click here to read more.

Lawrie described the SMB market as about 50 percent of the CRM opportunity in virtually any country in the world.

“This is a big part of our approach for growth,” he said. “We talked about participating in new markets. Small to medium business is an example of a market we need to participate in a more full way than we have to date.”

Cleveland said Siebel’s new SMB channel program takes the best of what other companies such as, Microsoft, SAP AG and Pivotal Software have done to reach the SMB space. He said Siebel’s sell-through strategy was modeled after Microsoft’s, though would be more exclusive and “invitation-only.”

It copied’s use of sharing sales materials, SAP’s concept of partnership and Pivotal’s concept of joint selling.

“We’ve come up with a unique program that’s different in form and structure. “We’ll make a strong entry into SMB marketplace,” Cleveland said.

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