I read a fairytale earlier this year in CNN Money. It was about all the big bad wolves that killed Siebel. A delusional account disguised as true story and moral tale.
The only piece of reality in the fairytale was that the big bad wolf was not Salesforce.com. A myth. My career in Salesforce.com spanned over a decade and I helped to take plenty of business off Siebel, but Benioff & Co. did not kill them. According to an ex-Siebel executive the real reasons they suffered a rapid demise were global recession and the fact that they were too big to change their business model or innovate.
Oh…and Siebel’s “turnaround plans were interrupted” by Larry Ellison acquiring them. Poor lambs.
The fairytale’s implications?
1. External factors were responsible for Siebel rapidly shrinking from 30B USD Market Cap behemoth to 20% of that.
2. Siebel’s executives were unlucky as they were just about to turn their own fortunes around before Larry opened his wallet at their table.
So why did this Goliath meet David so soon?
With 2B USD revenue, a large war chest and a completely dominant market position, Siebel rapidly morphed into the incredible shrinking man. Siebel needed to learn from its fastest growing adversary (Salesforce.com), take some painful medicine and cannibalise some of its own business by moving to the cloud and pouring finances into developing a great cloud based CRM app. They could have created one so great that it would have formed the basis of a global platform. They didn’t. Salesforce did.
Siebel failed to change before they were left behind.
They had all the resources to innovate smartly but instead they became the proverbial ostrich with its head in the sand. In stark contrast Salesforce’s leadership was incredibly strategic. They listened to the winds of change and continuously evolved. Salesforce.com remains highly innovative today despite being on a run-rate of 2.65X Siebel’s long forgotten peak revenue. Salesforce is not greatly slowed by having a larger Market Cap than Siebel in its heyday. Siebel made hay at the beginning when there was a great idea and no alternatives in the market.
So who killed Siebel?
Being too large to innovate?
The big bad wolf was in the mirror and it blew its own house down.
Forget mystery or myth. All organisations will create and meet their inner Davids eventually. The not so great ones create David with haste.
Siebel killed Siebel with vulgar haste.
“For me, it is far better to grasp the Universe as it really is than to persist in delusion, however satisfying and reassuring.”
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