Combines Customer-Centric Go-To-Market Model and Value-Added Partner Ecosystem with Proven Solutions Designed to Meet Needs of Small-and Medium Sized Businesses

San Francisco, - Calif., Dec. 7, 2004 - Siebel Systems, Inc. (Nasdaq: SEBL), a leading provider of business applications software, today announced a comprehensive three-pronged strategy focused on enabling small and medium businesses (SMBs) to achieve sales, marketing, and service success. Through the unique combination of a customer-centric go-to-market model, value-added partner ecosystem, and proven CRM offerings, Siebel Systems' SMB strategy addresses the specific sales, marketing and service needs of SMBs. Executives from Siebel Systems, including J. Michael Lawrie, CEO; and Bruce Cleveland, Senior Vice President and General Manager, OnDemand and SMB; introduced the company's SMB strategy at an event held at the W Hotel in San Francisco this afternoon.

"There is a significant opportunity to extend our expertise as the most trusted front-office solutions provider to help small- and medium-sized businesses achieve sales, marketing, and service success," said Mike Lawrie, Chief Executive Officer, Siebel Systems. "Penetrating this market is a key component of the next phase of growth for Siebel Systems. With today's announcement we have developed the industry's most complete strategy, based on more than ten years of market leadership and experience, to ensure that any company -- small, medium or large -- can enhance its sales and service effectiveness levels, deepen customer relationships, and increase revenues through the use of Siebel CRM solutions."

Leading industry analysts estimate there are more than fifteen million SMBs globally, and that in North America alone only two percent of small businesses have implemented CRM. The SMB market, which Siebel defines as companies with annual revenues under $500 million, has been under-served by traditional SMB vendors such as Onyx, Pivotal, Salesforce.com, and SalesLogix. In contrast, Siebel is raising the bar in delivering a new level of service and capabilities to meet the specific needs of the SMB market.

"Small- and medium-sized organizations have an unmet need for proven, complete CRM solutions that enable them to upgrade from spreadsheets, home-grown contact management tools or legacy software systems they are currently using," said Bruce Cleveland, Senior Vice President and General Manager, OnDemand and SMB. "In evaluating these solutions, SMBs would benefit from working with trusted providers that have deep expertise, leading technologies and a strong track record of customer success from applying best practices to enable key sales, marketing, and service business processes. As the CRM market leader, Siebel Systems is uniquely qualified to help these companies achieve success with this comprehensive, innovative strategy."

Customer-Centric Go-to-Market Model to Drive Successful Business Outcomes

As part of today's announcement, Siebel Systems has unveiled a go-to-market strategy that aligns Siebel and its channel partners around consistently leveraging their combined domain expertise to provide demonstrable business results for SMBs. In addition to building a dedicated sales organization focused on the SMB market, Siebel Systems has already enlisted resellers and channel partners worldwide that have significant expertise and market presence with small-and medium-businesses. "We took a scientific approach in developing this go-to-market model by first assessing all of the common models prevalent in the market today," added Bruce Cleveland. "We then combined the best elements of each of these models to ultimately develop the most customer-centric approach that also maximizes our reach to SMBs."

In developing its SMB Channel Program, Siebel Systems has incorporated the following unique elements:

Regional Marketing - Siebel has built a global sales and support organization focused exclusively on the SMB market. The SMB sales representatives - called Territory Managers - will work closely with SMB channel partners to develop joint business plans focused on building business in their regions. Siebel Systems will support these efforts through a cooperative marketing fund based on partner license sales, and by providing turnkey marketing programs that partners can leverage. Channel partners will benefit from Siebel Systems' leading brand, content, marketing execution resources, and global scale.
Partner Fulfilment - Siebel Systems will target fulfilling a majority of its SMB solutions through its SMB channel partners. Partners will benefit from an optimized lead sharing process that eliminates channel conflict. Furthermore, channel partners can rapidly build or grow their revenues with Siebel's SMB solutions based on this business model.
Team Selling - Channel partners are an extension of Siebel Systems' direct sales teams and will receive the same training, sales and marketing materials as Siebel's own sales professionals. Additionally, Siebel Territory Managers will work closely with partner resources to co-sell and jointly develop customer success plans, continuously engage in knowledge transfer to ensure that all partners can deliver consistent customer experiences, and foster an engagement model that ensures a seamless transition from sales to implementation to ongoing support.

Siebel Systems' global coverage model strategy is focused on delivering the broadest coverage with a select global network of partners that is uniquely equipped to focus on business outcomes and customer satisfaction. Siebel has recruited the following new SMB channel partners, including:
North America: Clear-to-Close; eVerge Group; FMT Consultants; Le Groupe SCI; Tier1 Innovation LLC.
Europe: Axias NV; EDB Gruppen; Elsis, Ltd.; Escador; Evosoft; OCB.
Latin America: BD Consultore; Innovatica.

"Tier1 Innovation is pleased to be selected to participate in Siebel's SMB Channel Program," said Mark Johnston, President, Tier1 Innovation. "We believe strongly that with Siebel's strong commitment to partners and the SMB market, we can build a mutually beneficial relationship that will allow us to expand our ability to deliver solutions that meet the unique business needs of our SMB customers."

"Clear-To-Close is pleased to be the first Siebel alliance partner to bring the depth and breadth of Siebel hosted solutions to the burgeoning SMB brokerage market, which encompasses 40,000 registered firms," added Faisal Syed, CEO of Clear-To-Close. "Siebel CRM OnDemand and Siebel Contact OnDemand complement our back-end mortgage and lending processing solutions with capabilities that facilitate communication and interaction among brokers and their customers. As a result, brokers can further increase productivity, reduce costs, and enhance customer satisfaction and loyalty."

Finally, Siebel Systems is working closely to leverage its deep partnerships with global leaders in the SMB market such as IBM. IBM has incorporated Siebel CRM OnDemand, a joint offering from IBM and Siebel Systems, into the IBM Express Portfolio of offerings specifically priced and designed for SMBs. In addition, IBM and Siebel jointly offer this solution to IBM Business Partners.

"We share a common view with Siebel that SMBs require solutions tailored for their specific market requirements and needs," said Marc Lautenbach, General Manager of Global Small and Medium Business, IBM. "IBM's work with Siebel to bring CRM solutions to the SMB marketplace is an important part our own strategy for SMB customers."

SMB Partner Ecosystem Provides Complementary Offerings

In order to provide a more complete range of front-office solutions for SMBs, Siebel Systems is extending its industry-leading alliance program to SMBs. With more than 250 partnerships worldwide, Siebel Systems has built an award-winning Alliance Program that enables its customers to work with consulting, software and platform partners that have satisfied Siebel's stringent, multi-step Validation Program and developed complementary offerings. As part of its SMB Alliance Program, Siebel Systems has recruited partners such as Above All Software, Antenna Software, Envisage Solutions, Leverage Software, Pervasive Software, Sendia Corporation and Spoke Software that are specifically focused on the business requirements of SMBs, and is working with these technology and service providers to provide complete, integrated offerings for its customers.

A key benefit of the Siebel SMB Alliance Program for SMB customers is a wider range of tailored CRM solutions for industries not directly served by Siebel Systems. For SMB Alliance Partners, benefits of working with Siebel Systems include gaining the ability to quickly build a winning business model based on the company's flexible and standards-based development platform, open APIs to facilitate the development of integrated partner solutions, a powerful tool kit that streamlines the development process, and comprehensive support to ensure partner success.

"We are excited to be working with Siebel Systems as their leading integration partner to jointly develop a wide range of compelling CRM solutions for SMBs," said Roger Sippl, CEO of Above All Software. "Siebel has a unique strategy for reaching the SMB market and powerful offerings to meet the customer demand for both hosted and on-premise solutions. Our partnership will provide Siebel customers with traditional batch integration capabilities and data synchronization between Siebel on-premise applications, other enterprise and legacy applications, and Siebel CRM OnDemand. In addition, customers can rapidly assemble new composite applications that extend the reach of Siebel CRM solutions across the organization."

Proven Solutions Tailored for SMBs

Siebel Systems is the only CRM provider that delivers both a hosted and on premise solution offering small and medium sized companies a choice of deployment options based on their needs. Common to both solutions is a proven technology platform developed over more than ten years and with more than $2 billion of focused research and development.

For growing companies seeking a complete, fast to deploy CRM offering, Siebel CRM OnDemand provides a hosted solution requiring no upfront investments in hardware or software and no additional maintenance, upgrade or support costs. Siebel CRM OnDemand delivers unique capabilities such as powerful real-time and historical analytics, built-in contact center capabilities and pre-built industry-specific solutions. With hosting provided by IBM hosting services, Siebel CRM OnDemand helps provide SMBs with world-class security capabilities, performance, reliability, and scalability their growing businesses require.

For SMBs that prefer to maintain control of their hardware and applications onsite, Siebel CRM Professional Edition delivers a leading software solution that provides highly configurable, extended CRM functionality through its powerful customization and integration tools. With its unique, extensible design, Siebel CRM Professional Edition can be adapted and expanded with additional modules to meet an organization's growing needs. This ensures that SMBs' CRM solutions are tailored to fit the unique requirements of their business.

"We selected Siebel CRM OnDemand because we wanted to take advantage of Siebel's leadership, expertise and best practices in CRM," said Stephen White, Director of North American Sales at Gracenote, the worldwide leader in information services for digital music and media. "Siebel CRM OnDemand is a world-class, hosted solution that is intuitive, easy-to-use, and constantly available. We were up and running in hours, and Siebel's professional services and customer care are phenomenal." With Siebel CRM OnDemand, Gracenote has doubled its sales force and expanded its sales coverage to six offices worldwide over the past six months.

"Our customers trust us because we are part of the community, and Siebel CRM Professional Edition gives us immediate access to the information we need to deliver dependable and responsive service," added Rob Verratti, Vice President and Senior Credit Officer for WestStar Bank of Vail, Colorado. "With Professional Edition we gain a comprehensive view of new business opportunities, relevant contact information, status reports and follow-up information. Siebel has also helped us to improve pipeline management by giving our associates access to deal information in a timely manner. This allows WestStar to allocate resources where they can be most profitable. Deploying the application was a collaborative effort that resulted in a project that was on time and within budget. Tier1 Innovation, one of Siebel's licensed resellers, got us up and running in six weeks."

For more information on Siebel's SMB Strategy, visit www.siebel.com/smb

About IBM Hosting Services
IBM hosting services, a key part of IBM's on demand offerings portfolio, helps customers leverage Siebel's on demand CRM solutions on a flexible and cost-efficient basis. Other IBM on demand services include security capabilities, computing capacity on demand, software as a service and desktop management. Most services are sold on a usage basis, reducing the upfront capital investment and freeing up financial resources for strategic growth initiatives. IBM has been providing hosting services since 1995. For more information, visit: www.ibm.com/services/e-business/hosting/. About Siebel CRM OnDemand

Siebel CRM OnDemand is a hosted CRM offering delivered over the Web and accessible from an Internet browser at a fixed price per user per month. Customers can deploy Siebel CRM OnDemand quickly, easily, and affordably without any up-front IT investments. Siebel CRM OnDemand delivers complete sales, marketing, and service functionality; built-in customer analytics; virtual call center technology; embedded best practices; and world-class hosting services and support. Siebel CRM OnDemand is now available for purchase. For more information, please visit http://www.crmondemand.com About Siebel Systems

Siebel Systems, Inc. is a leading provider of business applications software, enabling corporations to sell to, market to, and serve customers across multiple channels and lines of business. With more than 4,000 customer deployments worldwide, Siebel Systems provides organizations with a proven set of industry-specific best practices, CRM applications, market-leading analytics products, and business processes, 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 30 countries. Media Contact:

Stacey Burbach
Siebel Systems, Inc.
Tel: (480) 377-3725
Email:

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Except for the historical information contained herein, this press release contains forward-looking statements that involve risk or uncertainties. 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 customer relations, such as the availability of Siebel Systems' products and services, customer implementation of products and services, relationships with customers, third-party vendors and systems integrators, concentration of revenues in a relatively small number of customers, existence of errors or defects in products, ability to successfully manage growth, 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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