Siebel Pricing – how to build your siebel solution

How Does Siebel Pricing Work?

• Component Licensing: Licenses individual products for specific users.
• Custom Application Suite (CAS) Licensing: Bundles multiple applications for defined users.
• Enterprise Licensing: Licenses entire organization without tracking individual users.
• User-Based Metrics: Includes Named User, Application User, Custom Suite User, and Concurrent User licenses.
• Hardware-Based Metrics: Includes Processor, Physical Server, and Computer licenses.

Introduction to Siebel Pricing

Brief Overview of Oracle Siebel CRM

Oracle Siebel CRM is a comprehensive Customer Relationship Management (CRM) software solution. Initially developed by Siebel Systems Inc., it was acquired by Oracle Corporation in 2006. Siebel CRM supports various business functions, including:

• Sales
• Marketing
• Customer service
• Analytics

It is widely used across multiple industries such as:

• Financial services
• Telecommunications
• Healthcare
• Retail

Importance of Understanding Siebel Pricing

Understanding Siebel pricing is crucial for:

• Making informed CRM investment decisions
• Budgeting effectively
• Ensuring compliance with licensing agreements
• Maximizing the value of the CRM solution

Purpose of the Article

This article aims to:

• Provide a detailed overview of Siebel CRM pricing
• Explain the historical context of Siebel pricing
• Describe current pricing models
• Discuss compliance considerations

By the end of this article, readers will have a clear understanding of how Siebel pricing works and strategies for managing costs and compliance.

Historical Context of Siebel Pricing

Pre-Oracle Acquisition Pricing Model

Before Oracle acquired Siebel Systems, the pricing model was based on:

• Individual applications
• Limited application bundles

Individual Applications

Siebel Systems sold its products as individual applications. Each application targeted specific CRM functions such as:

• Sales
• Marketing
• Customer service

Benefits:

• Flexibility to build a tailored CRM solution

Drawbacks:

• Higher costs for purchasing multiple applications

Limited Application Bundles

Siebel Systems also offered limited application bundles, such as:

• eAdvisor Bundle
• eConfigurator Bundle

Note: These bundles were not frequently sold and were tailored for specific use cases.

Post-Oracle Acquisition Changes

After Oracle acquired Siebel Systems in 2006, significant changes were made to the pricing and Siebel licensing models. Oracle integrated Siebel CRM into its suite of enterprise applications and introduced new pricing models.

Introduction of New Pricing Models

Oracle introduced three main pricing models for Siebel CRM:

1. Component Licensing
2. Custom Application Suite (CAS) Licensing
3. Enterprise Licensing

Component Licensing:

• Customers can license individual Oracle products.
• Suitable for organizations needing specific CRM functionalities.
• Example: Siebel CRM Base licensed per Application User.

Custom Application Suite (CAS) Licensing:

• Customers can purchase a bundle of different software products.
• Allows access to multiple Siebel applications as defined in the bundle.
• Example: Siebel CRM Base licensed per Custom Suite User.

Enterprise Licensing:

• Licenses the entire organization without tracking individual users or servers.
• Ideal for large organizations with extensive CRM needs.
• Example: Siebel Asset Management licensed by the Enterprise Metric “Enterprise $M in Revenue”.

These new pricing models have made Siebel CRM more accessible and manageable for organizations of all sizes, allowing them to choose the most suitable licensing options based on their specific requirements.

Current Pricing Models

Oracle Siebel CRM offers three primary pricing models to cater to organizational needs: Component Licensing, Custom Application Suite (CAS), and Enterprise Licensing. Each model provides flexibility and scalability to match specific business requirements.

Component Licensing

Definition and Usage:

Component Licensing allows organizations to license individual Oracle products for a limited number of end users. This model is ideal for businesses that require specific CRM functionalities without investing in a comprehensive suite.

Examples of Component Licensing:

• Siebel CRM Base per Application User:
  • Scenario: A mid-sized company needs a CRM solution for its sales team.
  • Usage: The company licenses Siebel CRM Base for 50 sales representatives.
  • Benefit: The company only pays for the specific number of users who need access, reducing unnecessary costs.
• Siebel Marketing per Named User:
  • Scenario: A marketing agency requires advanced marketing automation tools.
  • Usage: The agency licenses Siebel Marketing for 20 marketing professionals.
  • Benefit: Focused licensing on essential users ensures cost efficiency and targeted functionality.

Custom Application Suite (CAS) Licensing

Explanation of CAS Licensing:

CAS Licensing allows organizations to purchase a bundle of Siebel software products in one package. This model provides access to multiple applications within a defined suite, offering a cost-effective solution for businesses with diverse CRM needs.

Benefits of CAS Licensing:

• Cost Savings: Bundling multiple applications into one suite can be more economical than licensing each application separately.
• Simplified Management: Managing a single suite of applications is easier than handling multiple individual licenses.
• Flexibility: Organizations can choose from various suites tailored to their specific requirements.

Examples of CAS Bundles:

• Siebel CRM Sales and Service Suite:
  • Scenario: A retail company needs a comprehensive sales and customer service solution.
  • Usage: The company licenses the Siebel CRM Sales and Service Suite, which includes Siebel Sales, Siebel Service, and Siebel Call Center.
  • Benefit: The bundle provides an integrated solution covering multiple functions, enhancing overall efficiency.
• Siebel CRM Marketing and Analytics Suite:
  • Scenario: A financial institution aims to improve its marketing efforts and gain deeper insights into customer behavior.
  • Usage: The institution licenses the Siebel CRM Marketing and Analytics Suite, comprising Siebel Marketing, Siebel Campaign Management, and Siebel Analytics.
  • Benefit: The integrated suite offers powerful marketing tools and advanced analytics, driving better decision-making.

Enterprise Licensing

Overview of Enterprise Licensing:

Enterprise Licensing allows organizations to license the desired Siebel software programs for the entire enterprise without tracking individual user licenses, servers, or deployment locations. This model is particularly beneficial for large organizations with extensive CRM needs.

How It Differs from Other Models:

• No User Tracking: Unlike Component and CAS Licensing, Enterprise Licensing does not require tracking individual user licenses.
• Unlimited Access: Provides access to Siebel applications across the entire organization, regardless of the number of users or servers.
• Simplified Compliance: Reduces the complexity of license management and ensures compliance with minimal effort.

Example of Enterprise Metrics:

• Enterprise Metric “Enterprise $M in Revenue”:
  • Scenario: A multinational corporation with a vast customer base and numerous departments.
  • Usage: The corporation licenses Siebel CRM based on its annual revenue (e.g., Enterprise $M in Revenue).
  • Benefit: The company gains unrestricted access to Siebel applications across all departments, ensuring scalability and uniform functionality.

By understanding these pricing models and their practical applications, organizations can choose the most suitable licensing option for their specific needs, ensuring they maximize the value of their Siebel CRM investment.

User-Based Licensing Metrics

Oracle Siebel CRM offers various user-based licensing metrics to accommodate organizational needs and usage patterns. These include Named User, Application User, Custom Suite User, and Concurrent User licenses. Each type of license has its unique characteristics, benefits, and limitations.

Named User

Description and Typical Use Cases:

A Named User license is assigned to a specific individual authorized to use the Siebel CRM software. This license type is ideal for organizations with a stable number of users who require consistent access to the CRM system.

Real-Life Example:

• Scenario: A mid-sized insurance company needs to manage its sales force.
• Usage: The company licenses Siebel CRM for 100 Named Users, assigning licenses to each sales representative.
• Benefit: Each sales rep has dedicated access to the CRM system, ensuring they can effectively manage their customer relationships and sales pipeline.

Benefits and Limitations:

• Benefits:
  • Predictable costs: Licensing costs are stable based on a fixed number of users.
  • Dedicated access: Each user has guaranteed access to the CRM system.
• Limitations:
  • Lack of flexibility: If the number of users fluctuates, it can lead to either underutilization or the need for additional licenses.
  • Potentially higher costs: Organizations with many occasional users might find this model more expensive.

Application User

Detailed Explanation:

An Application User license allows an individual to use the Siebel CRM software installed on multiple servers. Unlike Named User licenses, Application User licenses are not tied to a specific individual.

Real-Life Example:

• Scenario: A global telecommunications company needs its technical support team to access the CRM system from various locations.
• Usage: The company licenses Siebel CRM for 200 Application Users, allowing team members to access the system as needed.
• Benefit: Access across multiple servers is flexible, suitable for teams that require variable usage.

Comparison with Named User:

• Flexibility: Application User licenses offer flexibility as they are not tied to specific individuals.
• Cost Efficiency: This can be more cost-effective for organizations with fluctuating user bases than Named User licenses.

Custom Suite User

When and Why It Is Used:

Custom Suite User licenses are designed for organizations that need access to a bundle of different Siebel applications within a defined suite. This license type is beneficial for complex environments requiring multiple CRM functionalities.

Real-Life Example:

• Scenario: A multinational retail corporation needs a comprehensive CRM solution that covers sales, marketing, and customer service.
• Usage: The company licenses a Custom Suite User package for 500 users, including Siebel Sales, Siebel Marketing, and Siebel Service.
• Benefit: Integrated access to multiple CRM applications within one suite, enhancing overall operational efficiency.

Benefits for Complex Environments:

• Integrated Solutions: Provides access to a wide range of CRM functionalities within a single suite.
• Cost Savings: Bundling multiple applications can be more economical than licensing each separately.
• Simplified Management: It is easier to manage a single suite of applications than multiple individual licenses.

Concurrent User

Definition and Scenarios Where It Is Applicable:

A Concurrent User license allows a specific number of users to access the Siebel CRM system simultaneously. This license type is ideal for organizations with users who do not need constant access to the system.

Real-Life Example:

• Scenario: A large educational institution needs its administrative staff to use the CRM system for student management.
• Usage: The institution licenses 100 Concurrent Users, allowing up to 100 staff members to access the system simultaneously.
• Benefit: Cost-effective for environments where not all users need simultaneous access.

Advantages and Drawbacks:

• Advantages:
  • Cost Efficiency: Only pay for the maximum number of users accessing the system simultaneously.
  • Flexibility: Suitable for organizations with fluctuating usage patterns.
• Drawbacks:
  • Access Limitations: If more users try to access the system than the number of concurrent licenses available, some users will be denied access.
  • Complexity: Requires careful management to ensure users have the access they need when they need it.

Organizations can select the licensing model that best fits their usage patterns and operational requirements by understanding these user-based licensing metrics and their practical applications.

Hardware-Based Licensing Metrics

Oracle Siebel CRM also offers hardware-based licensing metrics based on the hardware infrastructure rather than the number of users. These metrics include Processor Licensing, Physical Server Licensing, and Computer Licensing.

Processor Licensing

How It Works and Its Implications:

Processor Licensing is based on the number of processors (CPUs) on which the Siebel CRM software is installed and running. Each processor contributes to the total licensing cost.

Real-Life Example:

• Scenario: A financial services company deploys Siebel CRM on a server with eight processors.
• Usage: The company licenses Siebel CRM based on the eight processors in their server environment.
• Implications: The licensing cost scales with the number of processors, providing a straightforward metric for large-scale deployments.

Suitable Environments for Processor Licensing:

• High-Performance Requirements: Ideal for environments requiring significant processing power and high user count.
• Scalability Needs: Suitable for large organizations with substantial IT infrastructure that need to scale CRM operations efficiently.

Physical Server Licensing

Description and Typical Use Cases:

Physical Server Licensing is based on the number of physical servers on which the Siebel CRM software is installed. This model counts each server as a licensing unit, regardless of the number of processors.

Real-Life Example:

• Scenario: A healthcare organization runs Siebel CRM on five physical servers.
• Usage: The organization licenses Siebel CRM for these five physical servers.
• Benefit: Simplifies licensing management by focusing on the server rather than the processor count.

Comparison with Other Hardware-Based Metrics:

• Simplicity: It is easier to manage than processor licensing, especially in environments with multiple servers but fewer processors per server.
• Flexibility: Offers a straightforward approach for organizations with diverse server setups.

Computer Licensing

Explanation and Benefits:

Computer Licensing involves licensing the Siebel CRM software based on individual computers, such as servers, desktops, or other computing devices where the software is installed.

Real-Life Example:

• Scenario: A manufacturing company deploys Siebel CRM across 20 computers in various locations.
• Usage: The company licenses Siebel CRM based on these 20 computers.
• Benefit: Suitable for organizations with distributed environments and varying computing needs.

Limitations and Compliance Considerations:

• Hardware Limitations: Hardware may come with restrictions, such as the number of CPUs or the amount of data stored, which can impact performance.
• Compliance Risks: Organizations must meet all licensing terms to avoid penalties, requiring meticulous tracking and documentation.

Compliance and Cost Management

Effective compliance and cost management are crucial for maximizing the value of Siebel CRM while avoiding legal and financial pitfalls.

Common Compliance Issues

Unlicensed Functionality Usage:

• Issue: Organizations sometimes use Siebel functionalities they haven’t licensed, either inadvertently or due to improper tracking.
• Impact: This can lead to significant fines and the need for retroactive licensing.

Custom Views and Compliance Risks:

• Issue: Custom views may inadvertently access unlicensed Siebel modules, posing a compliance risk.
• Impact: This can result in substantial non-compliance penalties and increased licensing costs.

External User Licensing Pitfalls:

• Issue: External users (customers or partners) accessing internal applications without proper licenses.
• Impact: This misalignment often results in non-compliance and financial penalties.

Strategies for Managing Costs

Regular Audits and Monitoring:

• Action: Conduct regular audits of your Siebel CRM usage and licensing status.
• Benefit: Identifies potential compliance issues early, allowing for proactive management and cost control.

Proper Tracking of User Responsibilities and Access:

• Action: Implement robust systems for tracking user roles, access levels, and licensing allocations.
• Benefit: Ensures all users have the appropriate licenses and reduces the risk of unauthorized usage.

Communication with Oracle for Updates and Changes:

• Action: Maintain open lines of communication with Oracle to stay informed about licensing changes, updates, and best practices.
• Benefit: Helps to stay compliant with current licensing terms and avoid unexpected costs.

Organizations can effectively manage their Siebel CRM licenses by understanding and applying these strategies, ensuring compliance and optimizing costs.

Real-Life Pricing Examples

Case Study 1: Financial Services

Specific Pricing Model Used:

A mid-sized financial services company opted for Component Licensing for its Siebel CRM implementation. They licensed Siebel CRM Base per Application User to support their sales and customer service teams.

Benefits and Challenges:

• Benefits:
  • Cost Control: The company could budget precisely by licensing only the specific number of users who needed access.
  • Targeted Access: Allowed focused access for sales and customer service representatives without overpaying for unnecessary features.
• Challenges:
  • Scalability: As the company grew, the need to continually purchase additional user licenses became a financial and administrative burden.
  • Management Complexity: Managing individual user licenses requires significant effort to ensure compliance and efficient use.

Case Study 2: Telecommunications

Detailed Pricing Approach:

A large telecommunications provider chose Enterprise Licensing based on the metric “Enterprise $M in Revenue.” This approach allowed the company to license the Siebel CRM software for their organization without tracking individual user licenses.

Results and Impact on the Business:

• Results:
  • Simplified Compliance: Eliminated the need to manage individual user licenses, reducing administrative overhead.
  • Scalable Solution: Supported the company’s extensive and growing user base without additional licensing complexity.
• Impact:
  • Operational Efficiency: Improved operational efficiency by providing seamless access to Siebel CRM across all departments.
  • Cost Predictability: Enabled more predictable budgeting and cost management aligned with the company’s revenue growth.

Case Study 3: Healthcare

Pricing Strategy and Compliance Management:

A healthcare organization implemented Custom Application Suite (CAS) Licensing to manage patient relationships and service operations. They licensed a suite including Siebel Sales, Siebel Service, and Siebel Analytics for a defined user base.

Outcomes and Lessons Learned:

• Outcomes:
  • Integrated Functionality: Benefited from a comprehensive suite that provided integrated sales, service, and analytics capabilities.
  • Enhanced Compliance: Improved compliance management by bundling essential functionalities into a single licensing package.
• Lessons Learned:
  • Efficiency Gains: Achieved significant efficiency gains by using a bundled approach, which simplified licensing and reduced costs.
  • Proactive Management: Recognized the importance of ongoing license audits and proactive compliance management to avoid potential pitfalls.

Tips for Choosing the Right Pricing Model

Assessing Organizational Needs:

• Action: Conduct a thorough assessment of your organization’s CRM requirements, including the specific functionalities and user access needed.
• Benefit: Ensures that you choose a pricing model that aligns with your needs, avoiding over- or under-licensing.

Evaluating User and Hardware Requirements:

• Action: Evaluate the number of users and the type of hardware infrastructure your organization uses or plans to use for Siebel CRM.
• Benefit: Helps determine whether user-based or hardware-based licensing metrics suit your environment.

Balancing Cost and Functionality:

• Action: Consider the cost and the functionality offered by different licensing models, aiming for a balance that maximizes value.
• Benefit: Ensures you receive the necessary features without overspending on unnecessary capabilities.

Consulting with Oracle and Partners:

• Action: Engage with Oracle representatives and certified partners to gain insights into the best licensing options and practices.
• Benefit: Leverages expert advice to make informed decisions, ensuring compliance and optimizing costs.

By following these tips and examining real-life examples, organizations can choose the right Siebel CRM pricing model that best fits their needs, ensuring efficient use and cost-effective management of their CRM solutions.