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Which one has better prospects, Siebel or Salesforce?

In the early days, Salesforce focused on small and micro enterprises that Siebel disdained to serve. Such customers have short sales cycles and high order closing rates, and can be won with extremely low CAC.

But the market capacity of this type of customers is limited. If you look at the corporate employment data released by the U.S. Bureau of Statistics in 2001, nearly 70% of employees work in companies with more than 200 people (Salesforce's definition of SMB). Salesforce charges on a per-capita basis. If we roughly assume that the sales and employment ratios of these companies are not very different, then 70% of the market is also in large companies. Not only do these companies use SaaS to replace the existing market of traditional software, some companies have not even completed the penetration of CRM software, and there is still a part of the incremental market.

More importantly, large companies have strong payment capabilities and low bankruptcy rates, which can support higher LTV. At the same time, the complex management needs of large companies mean that more different products can be cross-sold to increase ARPU in the future, and the potential for future monetization will be greater.

As the United States emerges from the Internet bubble, many of Salesforce's early startup customers have also begun to grow from small businesses to medium-sized and large enterprises, putting forward new requirements for Salesforce's continued service capabilities.

Realizing the strategic importance of large accounts, Salesforce quickly began to build its own field sales team. In the past, Salesforce's sales were mainly based on electronic sales. It recruited a large number of fresh graduates from good universities to do sales. The team was young and energetic, and they could quickly establish relationships with small and medium-sized enterprises. But to win big customers, it is difficult to build enough trust through telemarketing, and it is necessary to recruit a more experienced professional sales team to visit customers for on-site sales.

In the process of organizational and product upgrades, Salesforce still maintains a flexible organizational structure and the same set of product codes to ensure that it can serve different types of players in the market in a scalable manner.

As a result, Siebel's revenue began to enter a downward channel, and did not rise significantly after the release of new products in 2003. In 2005, it was acquired by Oracle for US$5.85 billion, which was only 1/10 of its peak market value.

Salesforce, on the other hand, relies on its strategic focus on multi-tenant architecture, the same set of code, and subscription-based payment to continue to maintain its market leadership in the rapidly growing CRM market, and subsequently continues to enter the market through open platforms and mergers and acquisitions. In a new field, the market value exceeded 100 billion US dollars.