In a bid to generate more business from activities layered upon its core communications products, BT has begun a major push into customer relationship management by extending its relationship with Siebel.
BT will brand and sell a Contact Central package based upon Siebel's Call Center application and CosmoCom's IP plumbing that is designed to handle voice, fax, email and Web calls. It will be aimed at businesses with less than $360 million in annual revenue, and will start at ?200,000 pounds for 36 users.
The451 learns that this is just the first step in an overhaul of BT's low-end (customer contact), midrange SME (customer reach) and high-end (customer insight) CRM businesses, as it likes to call them. It plans to build out buy-side and 'inside' (a company's internal CRM infrastructure) technologies as well as the sell-side opportunity it has targeted here.
We hear BT will also return to the ASP font next quarter, a business model it has embraced and spurned a number of times over the past few years, including a brief dalliance it had with SAP.
BT wants to increase its CRM revenue from $1.1 billion (or 25% of its addressable market) to $1.4 billion by next April and $2.8 billion by 2005, or roughly 30% of an addressable market. With 21 million customers in total -- one million of which are already paying bills online -- and an estimated 40% of call center calls estimated to come through multichannel contact centers by 2004, can BT afford not to? It's already spent$20 million fitting its own systems with Siebel. Now it's looking for a return.
BT forecasts 1,000 installations of the package by next March. It comes pre-installed on Intel servers and can attach to a private branch exchange, ISDN line or a couple of analog lines, the company says. BT will target 3,000 upgrades of traditional contact centers as well as centers with 200 or more agents, and will develop new opportunities in conjunction with Accenture.
In addition to the Siebel deal, BT has extended an agreement with Nortel for another five years and has other relationships with Cisco and Avaya at the low end. Genesys and BroadVision are its partners in the midmarket, with Accenture and Siebel at the high end. BT believes it currently has 20% of the addressable part of the low-end market, which it estimates to be $2.17 billion in total; 33% of the midrange market, which is $1.9 billion in total; and 5% of the addressable high-end market, worth $791 million.
Indeed, CRM is the third initiative spawned by BT's Retail group. First is the SME business with partners Microsoft, Dell and Cisco. It has a sales pipeline five times as big as before it put the project together, BT claims. Second is the entertainment project with SkyDigital and ITV Digital to deliver interactive TV services over its lines. BT claims to have attracted 100,000 business leads since announcing the project in June, although it isn't live yet.
ConclusionBy all accounts, BT -- while regarded locally as a laggard stuffed with overpaid underachievers -- is ahead of the game, if not pushing the envelope, as far as CRM and telecom companies are concerned. At least that's what Siebel reckons. That's why it had founder Tom Siebel on hand in London to trumpet the partnership.
But once the PR fluff is blown away, what exactly does it amount to? Despite a press release describing the formation of a "strategic partnership," BT is already a Siebel alliance partner and reseller. This means it can, under certain conditions, sell enterprise Siebel licenses. It is one of a small group of resellers, too.
BT was only worth some $716,000 in revenue to Siebel last quarter. The Contact Central deal with be worth $28 million to it over three years, but there will be more value in helping Siebel in its more difficult midmarket space. However, the deal is only going to be worth $71 million to BT over the same period, and it's already spent $4.2 million getting the technology development this far. So where's the meat?
Now organized along three horizontal layers (network, solutions and customer engagements) instead of vertical market groups, BT says its new strategies, including the CRM push, will pay off within two years. It can't do much worse.HR> the451 (www.the451.com) is an analyst firm that provides timely, detailed and independent analysis of news in technology, communications and media. To evaluate the service click here.