Siebel Systems founder and CEO Tom Siebel will step down and be replaced by IBM sales and distribution head Mike Lawrie, the company has announced. Siebel will remain the company's chairman.

Tom Siebel said Lawrie's appointment stems from a decision he made a year ago to separate the roles of chairman and chief executive officer. "We're very, very pleased that our first choice for the job ultimately accepted," he said invoking his royal position at the company. "We cannot imagine a more experienced or talented executive to assume the role."

IBM announced Lawrie's departure yesterday but did not say where he was going. Lawrie, 50, has spent more than 25 years at IBM working in a variety of marketing, sales, development and finance roles. He took charge of IBM's sales and distribution operations in 2001.

IBM and Siebel are close business partners, and Tom Siebel said he is pleased Lawrie will join Siebel after several years of working with the company as a partner. IBM is one of Siebel's largest customers and its top marketing partner. The companies did $1 billion in joint business last year, Siebel said.

Siebel, 51, started Siebel Systems in 1993 after rising through the executive ranks at Oracle. Like his mentor Larry Ellison, he is known as an outspoken and domineering leader. The company said he will continue to work full-time at Siebel, focusing on strategy, customer relations and representing Siebel to the business and political communities.

Siebel said during Monday's conference call that he did not step down to pursue opportunities outside Siebel. "I have no intention of anything like that. My role here will be to continue as an employee and assist Mike wherever I can," he said.

But he also emphasized that he won't be continuing as the company's operational leader: "Mike is the CEO. Mike runs the company. The entire executive team reports to Mike," he replied to a question about his future responsibilities. Lawrie's appointment as CEO will be effective Tuesday.

Analyst Josh Greenbaum called the executive change a shock, but a welcome one. "Siebel is known to be the ultimate control freak - he's hand-on to the nth degree - so the fact that he's walking away from this operational role is a little surprising. On the other hand, it's a good move. It's long past time for some new blood to be injected into the company," said Greenbaum.

Lawrie said he's pleased with Siebel's trajectory, strategy and executive team and does not anticipate making drastic changes. Citing the newness of his position, he declined to discuss goals beyond keeping customers happy and maintaining Siebel's position as a market innovator.

Siebel essentially created the CRM market that it now leads, but the company's growth slowed in recent years as it confronted a downturn in software buying and increased competition from SAP, PeopleSoft and Oracle.