Billionaire Tom Siebel is taking on Salesforce and throwing punches at its AI product: ‘It’s all marketing and very little technology’

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Salesforce CEO Marc Benioff, Microsoft CEO Satya Nadella, Adobe CEO Shantanu Narayen, and C3.ai founder Tom Siebel

  • Salesforce has long been the dominant name in customer relationship management software. But the CRM industry was actually invented in the 1990’s by billionaire Tom Siebel.
  • Now Siebel’s current company, a startup called C3.ai valued at $3.3 billion, has joined forces with Adobe, and Microsoft to take on Salesforce with industry-specific, AI-backed CRM.
  • Siebel tells Business Insider he’s confident he can win this market because Salesforce has “been talking about AI for about a decade,” he said. “It’s all marketing and very little technology.”  
  • Visit Business Insider’s homepage for more stories.

In 1993, Tom Siebel launched Siebel Systems. Soon after, in 1995, the company introduced Siebel Sales Enterprise, the world’s first customer management software — a tool that at-the-time helped salespeople keep track of interactions with current and potential clients. 

It was the start of what would become a growing $80 billion market called “customer relationship management” (CRM) — one that is closely associated with Salesforce, despite the fact that the behemoth run by CEO Marc Benioff only holds an estimated 18% market share.  

Now, nearly three decades after creating the CRM industry, Siebel is returning to that world with a new product called C3 AI CRM, created in partnership between his startup C3.ai, Microsoft, and Adobe. Last month, the powerhouse trio said it would offer AI-enabled CRM software combining technology from all three providers — Microsoft Dynamics 365, Adobe Experience Cloud, and C3.ai’s data and AI models. 

As you might expect, Siebel is bullish on the prospects of competing head-to-head against Salesforce. Siebel believes his main rival has lagged in homegrown innovation of its signature product and has instead focused on acquiring outside companies to bolster its offerings to clients.   

“They’ve gotten behind the power curve as it relates to innovation,” Siebel said told Business Insider.”They have a great 20th century CRM product.”

Since broadcasting the partnership with Microsoft and Adobe, Siebel has not spoken to Benioff — who he says doesn’t “travel in the same social groups.” 

‘It’s all marketing and very little technology’  

In 2016, Salesforce rolled out Einstein — it’s AI product that Benioff proclaimed was the “world’s smartest CRM” despite mixed reviews at the time from users.

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Tom Siebel is the founder and CEO of C3.ai.

Analysts point to improvements the company has made to its AI offerings since then, particularly the infusion of technology from analytics firm Tableau and data management company Datorama — both of which Salesforce acquired. 

Those two acquisitions, along with its recent purchase of customer insights startup Evergage, make Salesforce “a prime candidate to deliver the next best experience for its clients,” according to Forrester analysts. “Salesforce’s vision to become the ‘platform partner of choice for the enterprise, enabling customer-centered digital transformations’ is bold yet attainable.” 

As a new competitor, it’s not surprising that Siebel sees things differently. “They’ve been talking about AI for about a decade,” he said. “It’s all marketing and very little technology.”  

Salesforce declined to comment.

Powerhouse trio

One area that Siebel says will differentiate his offering from Salesforce’s is that Salesforce Einstein largely relies on information already stored in Salesforce’s main CRM product.

C3 AI CRM will predominantly use outside data to amplify its offering — like social media feeds, analyst reports, market data, and other sources. 

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Marc Benioff is the CEO of Salesforce.

Only “5% of the data is coming from the CRM system and 95% is coming from open source and other information systems,” Siebel said. 

That should boost the product’s predictive analytics, helping companies forecast revenue and product demand, he says.

It should also help companies with sentiment analysis, or identifying perceptions about them and their potential headwinds.

Perhaps most importantly, this CRM product will be tailored to specific sectors — a strategy that aligns with C3.ai’s broader operations

That’s not a novel approach. There are numerous industry-specific CRM companies in the market today like Veeva Systems which serves the pharmaceutical industry. Veeva expects to hit $1.4 billion in annual revenue this year, it said in August. Dozens of other CRM companies have offerings tailored for specific industries, too, including Salesforce.

But what Siebel has that the others don’t is his history as the one who invented the market. And now he’s got two powerhouse partners, including Salesforce’s biggest rival Microsoft, in his corner, too.

“If you combine our capabilities with those of Microsoft and those of Adobe, there’s nobody in the world that can touch us technically,” he said.

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