Tuesday, September 13, 2005

Hit #63

Siebel (SEBL) was finally put out of its misery by Oracle in a buyout valuing Siebel at around $5.8 billion, which comes to $10.66/share. Siebel as a company deserved a much lower price; Siebel investors deserved much better. Siebel, the owner, and the Board don't deserve anything - they failed everybody.

This offer price represents a 7% discount to my average cost of $11.44/share. If I get a chance to opt for Oracle shares instead of cash, I will go for them.

Siebel did make a pitiful attempt recently to keep investors happy. Too little, too late! What were they thinking ?

Siebel spent more time making up dress codes and deciding where its employees could eat, than producing decent software. In fact, the story here is much the same as in most other Valley-based enterprise software companies - self-styled visionaries using innovation as an excuse to come up with ever-more complicated solutions that live in a closed world.

As Salesforce says, we need the "end of software". Customers don't need to be chained and gagged by these enterprise solutions, even if the chains are golden and the gag-fabric is cashmere.

Oracle will likely retire Siebel solutions down the road. The world will be a much safer place when that happens.

How will SAP go about reacting to this one ? SAP can definitely play a mock bidding battle, increasing the cost of takeover for Oracle! It worked once before, with Retek!

Previous hit - TeleSystem Intl (#62)


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