SAP subsidiary TomorrowNow is to begin supporting Siebel products, offering to halve the cost of customers' service agreements.
TomorrowNow has built a business offering third party support services for the PeopleSoft and JD Edwards products now sold by Oracle, and is ready to extend the service to Siebel products. Oracle acquired PeopleSoft (along with its JD Edwards subsidiary) in 2004, and bought Siebel in 2005.
Third party software support services provided by the likes of TomorrowNow, typically undercut the services provided by the software vendors themselves. That's because vendors divert much of the cost of software support contracts to fund new product development, according to Andrew Nelson, CEO of TomorrowNow.
By concentrating only on ongoing support, "We divide that cost in half," Nelson said. He means that literally: the company's pricing strategy is to bill customers half what they are paying Oracle for their support contract.
TomorrowNow has built a team of seven staff in North Carolina's Research Triangle Park to support the Siebel products. "It's one of the seven locations where Siebel had their global support centers," said Nelson.
"It's our strategy to be close to large, deep talent pools," he said.
The team will also be close to market: Nelson expects 80 percent of the Siebel service business to come from North American customers, and 15 percent to 20 percent from Europe.
For now, TomorrowNow will provide Siebel support only in English, but Nelson expects to add other languages as the business grows. Already, the company offers support for PeopleSoft products in 12 languages.
TomorrowNow is not alone in providing third-party support services for Siebel products. NetCustomer introduced its Siebel support service for enterprise customers last August - and added to it a service for former PeopleSoft and JD Edwards products this April.
Rimini Street, created by TomorrowNow co-founder Seth Ravin after he sold his stake in that company to SAP in January 2005, began supporting Siebel products in January this year and plans to support PeopleSoft products from the third quarter.
TomorrowNow signed up 121 deals last year, around 70 percent of them to support PeopleSoft products, and the rest for JD Edwards products.
With 12,000 potential customers, that gives the company around 1 percent of the market, said Nelson, so there's plenty of room to grow.
"We expect to continue to grow aggressively based on Oracle's strategy of making so many product lines redundant," he said.