The UpShot acquisition accelerates Siebel Systems' entering of the hosted CRM market and expands customer choice in this market segment. Specifically, Siebel Systems gains one of the industry's top hosted CRM solutions, enhanced Microsoft Office and Outlook integration, and more than 100 employees experienced in developing and administering hosted products. Furthermore, with the addition of approximately 1,000 customers, Siebel Systems advances its share of the hosted CRM market, a market estimated to exceed $2.7 billion by 2006.

"The acquisition of UpShot by Siebel Systems significantly alters the CRM landscape. Siebel gains immediate recognition that they are seriously investing in the on demand market. UpShot customers not only gain investment protection, but also a more scalable platform built upon J2EE and IBM WebSphere," said Sheryl Kingstone, Yankee Group.

Since the acquisition has been announced, Siebel has committed to support all UpShot customer.

"This is great news for UpShot and UpShot customers," said Kathy Fiore, CIO of AccuWeather, an UpShot customer since 2001. "We have been pleased with the UpShot service and for them to now be a part of a deeply resourced company like Siebel is very positive for us." AccuWeather is a leading provider of weather products and services benefiting hundreds of millions of people worldwide.

"As an UpShot customer, Colfax Power Transmission Group is encouraged by this merger," said David Brooksbank, Manager of Market Development, Colfax Power Transmission Group. "UpShot is the hosted CRM innovator and Siebel has unquestioned domain expertise. This is a significant move forward for the hosted CRM model." Colfax Power Transmission Group is a leading provider of industrial power transmission and has been an UpShot customer since 2003.

Back in October, Siebel Systems and IBM jointly announced Siebel CRM OnDemand, a hosted offering designed to meet the growing market demand for affordable CRM. Siebel Systems will offer Siebel CRM OnDemand plus Siebel CRM OnDemand—UpShot Edition, with a roadmap to converge the two products. UpShot customers can continue with the Siebel CRM OnDemand—UpShot Edition product and they will also be offered a next-generation hosted CRM product that combines Siebel's product architecture and the UpShot functionality with hosted CRM.

Siebel Systems will provide prebuilt integration for both Siebel CRM OnDemand and Siebel CRM OnDemand—Upshot Edition to Siebel on premise enterprise applications. This will give customers the choice of running their CRM system in a hosted environment, on premise, or in any combination of the two.

"We fundamentally believe that the decision to host a CRM solution or implement it on premise is not binary," said Steve Bonadio, Senior Program Director, META Group, Inc. "Several factors—including application best fit, growth and migration, IT maturity and constraints, and cost of ownership—must be explored prior to making a deployment decision. While both hosted and on premise CRM applications can provide significant value, we believe the winners in the space will offer both options, with well-defined integration and a migration path between the two delivery models."