Let's Make A Deal

Siebel gets personal with a dynamic pricing model

Online price competition for demanding customers is diminishing Internet retail margins, according to a recent Forrester Research Inc. report. “Pricing Gets Personal” predicts retailers that adopt personalized pricing will enhance their profitability. The ability to provide personalized pricing, however, begins with knowing the customer.

Responding to this personalization pressure, in April Siebel Systems Inc. acquired OpenSite Technologies Inc., a provider of Web-based dynamic commerce services and software, and concurrently launched its new application suite, eBusiness 2000. Siebel expects both of these moves to strengthen its market leadership in CRM by enhancing its ability to offer customer personalization over multiple channels, a key differentiation in today’s competitive Web marketplace.

Siebel eBusinesss 2000, the company’s sixth major release of its application suite, adds 28 new products and enhancements, including an expanded line of “.Com Applications” for directly selling, marketing, and providing customer service over the Web. One of the new components in this suite is Siebel Personalization, which Siebel touts as the industry’s first personalization server that customizes the buying experience across all communication channels, including the Web, call center, field sales and service, and channel partners. The purpose of this product is to target and tailor content to greet customers and present new offers. In addition, the new eCommerce Analysis tool in Siebel eMarketing 2000 lets companies segment their customer and prospect bases to analyze a campaign’s effectiveness and return on investment and use that information to generate new campaigns.

Although Siebel’s eBusiness 2000 offers significant enhancements in customer interactions with a company across channels, Siebel’s acquisition of OpenSite will also let it provide transaction options. Siebel’s goal is to add OpenSite’s open-pricing features — such as forward auctions, reverse auctions (procurement), auction networks, cross-auction portals, and exchanges — to strengthen the e-commerce solutions it offers its customers. According to Pat House, cofounder of Siebel Systems, “Customers are beginning to expect dynamic pricing.” They expect the price of a product or service to be sensitive to supply and demand.

For “Pricing Gets Personal,” Forrester surveyed online retailers, industry experts, and academics to determine the industry response to online price pressure. According to the survey, 57 percent of the retailers expect to offer multiple prices on the same item, and 71 percent of that group expect that strategy to take the form of preferred pricing for regular customers. “The bottom line for online pricing: Retailers are at the mercy of online consumers,” said Carrie A. Johnson, associate analyst at Forrester. “Online shoppers, empowered by technology and information, pit merchants against each other — demanding the lowest price possible. After all, other merchants’ prices are just clicks away.”

Siebel believes that with the release of eBusiness 2000 and the acquisition of OpenSite, customers will be able to choose not only how they want to interact with a company (through a call center or the Web) but also the pricing model involved — whether the traditional e-commerce fixed-price method or dynamic commerce.

— Michelle Nichols

Continued in News and Analysis Part II >>>

In Brief

After one of his company’s weakest quarterly performances in a decade, SAP America Inc. CEO Kevin McKay has resigned to pursue “other opportunities.” SAP America president Chris Larsen succeeds him.

Seeking a stopgap against customer relationship management (CRM) forays from Oracle and Siebel Systems Inc., SAP announced that it will resell Nortel Networks Inc.’s Clarify CRM package as well as integrate its call-center functionality into mySAP.com

BMC Software Inc. acquired Web-site management company Evity Inc. BMC will integrate Evity’s technology with Patrol to provide service-level management capabilities inside the data center as well as outside the firewall.

PeopleSoft Inc. acquired business modeling and analytics company Advance Planning Solutions (APS) Inc. PeopleSoft will integrate APS technology into its Enterprise Performance Management (EPM) suite, and former APS CEO Chuck Teller will head PeopleSoft’s EPM product group.

Informix has released the first extensible markup language (XML) document type definition (DTD) for data extraction, transformation, and load metadata. The company hopes the DTD will serve as an XML standard for data and metadata integration over the Web.

Midmarket ERP company Great Plains Software (GPS) Inc. acquired its longtime bitter rival, Solomon Software Inc. The acquisition is GPS’s fifth in the last six months.

GartnerGroup said it will offer a new monitoring service and software called eMetrix, which will give business managers realtime reports about supply-chain operations. InfoRay is the strategic technology partner involved.