Mogul Maneuvering

Oracle Acquires Siebel: The Montana Angle

By Jonathan Weber, 9-12-05

Today's news that database software maker Oracle Corp. will buy Siebel Systems for almost $6 billion comes as a surprise to no one in the technology business. Oracle and it's abrasive CEO, Larry Ellison, have for several years has been loudly proclaiming (and acting upon) their intention to consolidate the business of supplying business software to large companies. Siebel, founded by one-time Oracle executive Thomas Siebel, has struggled since the tech bubble burst in 2000, but it still has lots of customers and lots of cash in the bank.

I have not figured out yet how much Tom Siebel will make from the deal, but I'm sure it's plenty. And of course he's already cashed out lots of stock since the company was started in 1993 and is said to be worth over a billion. Why do we care? Because Siebel owns two ranches in Montana, and he has recently indicated his interest in public affairs by putting up $5.6 million to fund the anti-meth campaign that's currently all over Montana's airwaves. (His brother Ken also owns a ranch in the Bitterroot Valley and is a part of the stream access battle over the Mitchell Slough.)

I've seen speculation that Siebel aims to run for governor of Montana one day, and while I have no idea if that's true (his PR flak, Steve Diamond, didn't seem too inclined to put him on the phone to talk about it) it does stand to reason that he might be looking for other outlets for his energy now that he's got his company safely in the hands of Ellison. (Er, maybe not so safely if you work there, since massive layoffs are surely part of the Oracle plan, but that's another story).

In my previous life as editor of the Industry Standard I got know quite a lot about Siebel the company, though I never got to know Siebel the man. The company, well, we bought a lot of their software, which is supposed to enable you to manage all information about your customers in a seamless and practical way. It was extremely expensive - several million dollars - and it never really worked at all, though that was partly our own fault. We actually went bankrupt before paying all the bills, and somehow Siebel managed to be at the head of the line in bankruptcy court, which struck me as rather unjust.

Siebel had no future as an independent company, because others have come along with software that is far, far cheaper and works much better for most applications. Once customers commit to something like Siebel, however, they are committed for a long time because it is so expensive to implement, and that's a why it makes sense for Oracle to buy it.

Will Siebel, the man, use his money to good effect in his adopted state of Montana? We can only hope.

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