Microsoft and Siebel Systems Form Historic Strategic Alliance to Transform Enterprise Computing

LOS ANGELES, Oct. 21, 2002 — Microsoft Corp. and Siebel Systems Inc. today announced a multiyear global strategic alliance to deliver the first enterprise solutions that fully exploit Web services to meet the demands of todays enterprises. The alliance includes collaborative development, demand creation, global sales and integrated support for enterprise customers. Through the combination of Siebel Systems proven sales, marketing, and service applications and business processes based on industry-specific best practices and the groundbreaking Web services technology of Microsoft®
.NET, the alliance will deliver the most efficient and cost-effective application integration ever as well as raise user productivity and decision-making to new levels. The joint solution will set the new standard for the economics of enterprise application deployment, integration and support with the lowest total cost of ownership.

“Enterprise applications are shifting to industry-specific business processes and best practices exposed through Web services,”
said Thomas M. Siebel, Chairman and CEO of Siebel Systems.

By leveraging the unrivaled functionality of Siebel e Business Applications and the advanced capabilities of Microsoft .NET, the joint Siebel-Microsoft solution enables organizations to rapidly and cost-effectively deploy the best business solutions at the lowest total cost of ownership.”

“Microsoft and Siebel share a common vision for how enterprise applications should evolve to meet the demands of the marketplace,”
said Bill Gates, Chairman and Chief Software Architect at Microsoft.

Siebel Systems market-leading expertise in sales, marketing, service best practices and business processes, combined
with the power of Microsoft .NET, will help enterprises react to business change and realize greater value from their technology investments.”

Dramatic Expansion of Relationship

The alliance is a major expansion of the long-standing relationship between the two companies that today helps hundreds of the worlds largest organizations manage their customer relationships. Siebel Systems market-leading enterprise sales, marketing and service applications will be fully optimized for Microsoft .NET, and integrated product road maps will help ensure compatible and harmonized product releases. Working together in joint development laboratories in both Redmond, Wash., and San Mateo, Calif., Siebel Systems and Microsofts engineering teams will fully benchmark test, preoptimize and cross-certify Siebel applications with Microsoft platform software to maximize performance, scalability, reliability and security. Further, Siebel Systems will use Visual Studio®
.NET as its primary development toolset.

For the first time, the two companies are providing a single point of interaction for joint customers across sales, marketing and customer support. With a multimillion-dollar marketing investment by both companies, the far-reaching go-to-market strategy includes worldwide collaborative selling and a comprehensive set of integrated services and resources to provide expert assistance throughout the entire customer life cycle, from product evaluation and selection to installation, deployment and ongoing maintenance.

Track Record of Customer Success

“Christies has standardized on Siebel 7, enabling us to support multichannel interactions between our fine art specialists, our business development organization and our global customer base,”
said Steve Russell, Chief Information Officer at Christies Inc.
“We have also standardized on Microsofts strategic platform technologies, including Microsoft Commerce Server, Windows® client and server operating systems, Microsoft SQL Server™ and Microsoft BizTalk® Server for application integration. We are confident that the global strategic alliance between Siebel Systems and Microsoft will allow Christies to continue to provide unrivaled customer service at an even lower cost than we do today.”

Seizing the Web Services Opportunity

The new XML-based Web services model for connecting different systems is a catalyst for a new generation of business applications that directly address todays most pressing enterprise needs. As customers seek to simplify and speed integration, unlock more value from new and existing systems, and harness technology to streamline business processes, Web services provide a path to advance the way enterprise applications are designed and used. The Siebel-Microsoft alliance represents the first major step in turning this vision into reality for enterprise applications. Microsoft and Siebel Systems are uniquely positioned to take advantage of the Web services revolution and deliver the first enterprise applications that fully capitalize on the standards-based interoperability of Web services.

Delivering Next-Generation Enterprise Solutions

The joint solution initiatives will focus on three areas:

  • Siebel Integration Business Processes can be implemented and executed on Universal Application Network using Microsoft BizTalk Server and Visual Studio .NET design tools.

  • Siebel e Business Applications will use Microsoft .NET technologies to enhance interactivity of the Siebel Smart Client, integrate more tightly with Microsoft Office, and support deployment on emerging mobile devices.

  • Siebel e Business Applications will be optimized for Windows Server operating systems, Microsoft SQL Server and the Microsoft .NET Framework.

Driving Down the Cost and Complexity of Application Integration

Historically, the prohibitive cost of application integration has prevented organizations from fully unlocking the value of data in their systems and maximizing information-worker productivity. Today, enterprises spend up to 50 percent of their IT budgets on application integration, and the problem extends far beyond simply connecting customer relationship management (CRM), enterprise resource planning (ERP) and supply chain management (SCM) applications. The typical enterprise has an average of 50 applications in its IT environment, including packaged, legacy, custom and specialty applications, and larger organizations have hundreds or even thousands of applications that need to interoperate. In addition to connecting applications with one another, companies also must connect their employees with the business information and processes they need to do their jobs.

The standards-based combination of Universal Application Network and Microsoft BizTalk Server will enable organizations to rapidly and cost-effectively deploy cross-application, industry-specific business processes within and beyond the enterprise. Siebel Systems provides more than 450 prepackaged Universal Application Network business processes based on best practices in sales, marketing and customer service. Microsoft BizTalk Server, the industrys fastest-growing integration server, joins the Universal Application Network program, and BizTalk Servers graphical business process design tools are a preferred toolset for creating, modifying and deploying Universal Application Network business processes. BizTalk will bring Universal Application Network support for BPEL4WS, the Business Process Execution Language broadly endorsed across the industry for open, interoperable orchestration of Web services. Universal Application Network business processes running on Microsoft BizTalk provide an agile and highly cost-effective solution to connect employees, partners and customers to critical business data.

“Application integration is one of the top challenges for CIOs, a fact I can validate here at the new HP,”
said Michael D. Capellas, President of HP.
“Universal Application Network, combining prepackaged business processes from Siebel Systems based on best practices in sales, marketing and service with Microsofts BizTalk Server, provides a comprehensive business process integration solution for companies like HP with thousands of applications in operation.”

Setting a New User Experience Standard for Enterprise Applications

Siebel Systems and Microsoft are collaborating to create an even more productive user environment through a highly responsive and intuitive interface, providing users with a compelling, dynamic and efficient experience. Utilizing the Microsoft .NET Framework, the companies are jointly developing a new-generation Smart Client for Siebel applications. The new Smart Client will further enhance todays Siebel Smart Web Client, combining the maximum productivity and interactivity of a Windows-based application with the low deployment cost of a Web-based application. And, by extending the integration between Siebel e Business Applications and Microsoft Office, the worlds most popular productivity tools, the companies are bringing together critical business information and processes with familiar tools for decision-making and collaboration.

Today, Siebel e Business Applications can be configured once and deployed to a broad array of client devices, including Pocket PC and handheld devices. The companies will utilize Microsoft .NET technologies to connect Siebel e Business Applications with an even greater range of mobile devices as well as new smart devices through support of the .NET Compact Framework.

Best Business Solutions at Lowest Cost of Ownership

The joint solution also includes optimization of Siebel e Business Applications for Windows Server operating systems and Microsoft .NET Enterprise Servers, including Microsoft SQL Server and Microsoft Exchange Server, providing organizations with enterprise-class capabilities, ease of installation and maintenance, and superior price/performance. The Microsoft .NET Framework provides native support for XML Web services, and Visual Studio .NET provides the highest productivity development environment for Siebel Systems own development as well as for customers extending or integrating Siebel solutions with other applications. Siebel applications optimized for SQL Server 2000 will dramatically reduce the time required to bring these applications to market while offering the scalability for the most demanding customer requirements. Siebel Systems expertise and experience in large global enterprise deployments — many exceeding 10,000 users — combined with Microsofts software infrastructure leadership will deliver a highly reliable, scalable, secure and rapidly deployable enterprise solution at the lowest total cost of ownership.

About Siebel Systems

Siebel Systems Inc. is a leading provider of eBusiness applications software, enabling corporations to sell to, market to and serve customers across multiple channels and lines of business. With more than 3,500 customers worldwide, Siebel Systems provides organizations with a proven set of sales, marketing and service applications and business processes based on industry-specific best practices, empowering them to consistently deliver superior customer experiences and establish more profitable customer relationships. Siebel Systems sales and service facilities are located in more than 28 countries.

About Microsoft

Founded in 1975, Microsoft (Nasdaq
) is the worldwide leader in software, services, and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place, and on any device.

Microsoft, Visual Studio, Windows and BizTalk are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

Siebel is a trademark of Siebel Systems Inc. and may be registered in certain jurisdictions.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Except for the historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties. The success of the agreements and products described above and the future operating results of Siebel Systems may differ from the results discussed or forecasted in the forward-looking statements due to factors that include, but are not limited to, risks associated with new versions and new products, the availability of Siebel Systems products and services, implementation of products and services, existence of errors or defects in products, rapid technological change, dependence on the Internet, significant current and expected additional competition, and the need to continue to expand product distribution and services offerings. Further information on potential factors that could affect the financial results of Siebel Systems are included in Siebel Systems Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and its other filings with the Securities and Exchange Commission, which are available at . Siebel Systems assumes no obligation to update the information in this press release.

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