BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Elephant Goring To Internet Of Things: Tom Siebel Speaks Out

Following
This article is more than 6 years old.

Tom Siebel is the founder, CEO and chairman of C3 IoT, an IoT platform and applications company. During the 1980s Siebel worked and was an executive at Oracle. A serial entrepreneur, Siebel founded Siebel Systems in 1993 and sold it to Oracle for $5.8 billion in 2006. Shortly after founding C3 IoT in 2009, Siebel was gored by an elephant during a photo safari in Tanzania. He lost half his body fluid and required 19 surgeries to be able to fully walk again.

Q: Your 2009 elephant goring, tell us what happened.

Siebel: My wife and daughters wanted to go on safari in Africa. We stayed at a place called Faru Faru Lodge in the Serengeti, and spent about three days riding around in Land Rovers, before deciding we’d take a walking safari. I was armed with a Nikon camera, and the guide had a double-barrel .470 rifle. He explained that if we were charged by an animal it was very important not to run. You run, you’re going to get hurt. “Okay, fine. Got it.” And out we went for a walk.

Timothy Archibald for FORBES

It was daybreak, with not a breath of wind. We came upon a herd of elephants—about 15 of them, juveniles and adults—200 yards away. We stood there and watched for about five minutes. There must have been a little wind shift, because all of a sudden this one matriarch goes back on her haunches, flattens her ears back, lifts her trunk in the air and bellows. It was deafening. She then focuses and makes a beeline for us. She’s five tons and traveling at 30 miles an hour, so she covers 200 yards in no time at all. This elephant is coming in 150 yards, 100 yards; the guide doesn’t shoot. Eighty yards, 70 yards, 60 yards; the guide doesn’t shoot. Okay … 40 yards, 30 yards; the guide doesn’t shoot. He shoots at, maybe, 6 yards. And misses.

The elephant takes the guide and hurls him about 12 yards away. Then she comes up and stands right in front of me, not more than 18 inches from my face. I’ll never forget that moment as long as I live. Meanwhile, I’m following directions, trying not to run. Elephants can move 30 miles an hour, so you’re not going to outrun one, anyway. One one-thousand, two one-thousand, three one-thousand; there’s the elephant. I can see it, I can smell it—the hair follicles, the tusk, the hoof, the eyeball—everything. It’s like, “Okay. Fine. What are we going to do now?”

Then the elephant proceeds to knock me to the ground, rolling me and punching me. I took a tusk through my left leg. She stepped on my right leg, and my foot came off. I was taking hits that were just … the pain was unimaginable. I was holding onto my head, just trying to hold on for life, and I remember very clearly thinking, “Please, God, make this stop.” I’m not really sure I cared how it stopped. But it needed to stop, because I couldn’t take it any longer.

Q: You almost preferred death at that point?

Siebel: Yeah. Next thing, I look up and the elephant’s gone. The dust settles, and I look over about 20 yards away to see the guide lying there, playing dead—lying on top of a loaded, double-barrel .470 rifle, only one barrel of which he discharged. He could have reloaded it six times! No … he’s playing dead because he thought I was dead, and he didn’t want the same fate. I remember saying, “Hey, Lee, this might be a good time to reload that rifle.” So he came over and reloaded the rifle. Then he got on the radio. They called a bunch of people with trucks, and they surrounded me with pickup trucks. And I lay there for three-and-a-half hours, with my foot off of my right leg.

Q: By “off,” you mean –

Siebel: Off. Detached. Hanging on by a flap of skin and one artery. I stayed like that until some medics were brought in from Nairobi. I went from there to the back of a pickup truck to the back of a Cessna, and took the Cessna to Nairobi to the Aga Khan Hospital. You want to be scared? Have surgery in the Aga Khan Hospital in Nairobi. Then I was airlifted from Nairobi to San Jose. Over the next three years I had 19 reconstructive surgeries –and walked three years later. I think I’ve fully recovered, but it was a pretty difficult experience.

Q: But the foot was saved?

Siebel: The foot was saved. This is my foot. [Siebel shows his foot, but the ankle and lower shin are about twice the normal thickness.] I left two centimeters of my tibia in the Serengeti. A piece of bone was missing from the middle. So the doctors carved out a chunk of my pelvis—about the size of your fist—and packed it into that gap. The idea being that if everything lined up, it would calcify and become bone…

Q: But not all at once.

Siebel: It takes many repetitions.

Q: What year was that?

Siebel: August 1, 2009. I walked in 2012.

Q: Wow. But 2009 is when you started the company that’s become C3 IoT?

Siebel: Started it in January of 2009.  So after the goring I was out of commission for the better part of its first two to two-and-a-half years.

Q: This follows a similar path to when, soon after launching Siebel Systems, you were kicked in the head by a horse.

Siebel: Yeah. We started Siebel Systems in 1993. In 1995 I was pretty severely injured by a horse kick. I was hospitalized with the prognosis of “permanent, irreparable brain damage.” It’s hard to tell whether that prognosis turned out to be accurate or not. [Chuckles] That being said, we took the company public a year later.

Q: Maybe the horse kick reduced your inhibitions! But back to the present and your current company, C3 IoT. What was your motivation to start this company?

Siebel: We originally called it C3, and it was very much a mission to make a contribution to the energy dialogue globally. We looked at the new technologies that were emerging in 2008 and could see that the big vectors would be cloud computing, big data, machine learning, IoT. So we took those vectors and pointed them at the electricity grid, with the idea of making it a smarter grid.

Q: Why choose the electric grid as your test case?

Siebel: The grid as it existed in 2000 was a value chain that consisted of generation, transmission, distribution, metering and then consumption. It was largely as it had been designed by George Westinghouse and Thomas Edison and hadn’t changed all that much.

But suddenly in the early 2000s you could see all the pieces coming together. All the devices in the value chain became remotely machine-addressable. Everything gets sensored, whether they’re thermostats, smart meters, capacity banks, transformers, substations. So it’s “IoT meets the grid.” Basically, we saw an opportunity to build big data, predictive analytics and IoT applications for grid operators worldwide. This decade the amount that’s being invested worldwide to sensor the grid infrastructure is $2 trillion. So this is a huge investment, bigger than the investment in the Internet in its early days.

Q: What’s your assumption on the growth of sensors?

Siebel: The data are pretty compelling. At the beginning of the century there were about a half-billion sensors out there. Today there are 19 billion. In five years I think there’ll be 50 billion. All the value chains are being sensored: oil and gas, energy, telecommunications, travel/transportation, aerospace, health care. The IoT phenomenon will be a major vector in the first half of this century.

Q: But will it continue to progress at these rates? Moore’s Law is slowing down.

Siebel: Well, Moore’s Law at the silicon-chip-density level is slowing down. But I’d argue that with cloud computing there’s an acceleration in Moore’s Law’s impact. The cost of computing is a falling knife. The cost reductions are accelerating. Nobody’s ever seen anything like this. Cloud, to me, looks like a quarter-trillion-dollar replacement market for everything that’s going on in enterprise computing.

Q: But you’re not the only one to see this. Amazon sees it. Microsoft, Google, IBM, GE … some of the world’s biggest and richest companies see it, too. What can C3 IoT bring to this space?

Siebel: Well, I think it’s a classic innovator’s dilemma problem. I mean, how did Siebel Systems ever pull off CRM? Larry Ellison had 3,000 people assigned to compete with us at Siebel for ten years. For Oracle’s investment in 3,000 engineers, Larry got less than 1% market share.

Q: Yeah.

Siebel: So explain how Amazon AWS happened. Where on earth did that come from, and why did Amazon get it and not IBM? Jeff Bezos sends, like, 12 people to South Africa, and they come back with AWS a year later! I mean, are you kidding me? Meanwhile, IBM and Hewlett-Packard are sitting on their heels someplace. Big companies can’t do these transitions.

Q: GE wants to own the IoT market. What do you think about that?

Siebel: GE, seriously, is the world’s greatest 19th-century company. Its market value over the last 17 years has gone from $495 billion to about $250 billion. Nice job. I mean, these guys make valves, they make pumps. All of a sudden one day Jeff [Immelt] wakes up and decides, “Oh, I know what we are. We don’t really make valves and pumps anymore. We’re the world’s greatest 21st-century information technology company.” Is this a joke? Then he assigns 3,000 people and spends $3 billion to build a software stack that’s going to be about big data, predictive analytics and IoT, and it’s going to revolutionize information technology.

Q: You compared Amazon’s AWS skunkworks, with its 12 people, to failed teams of thousands. Does it come down to size?

Siebel: How many important products can you think of in the history of the IT business that were built with 3,000 people? I mean, how many people built the first Microsoft product? Two. The first Oracle product? Twelve. How many people built SAP R1? Eighteen. How about the Apple computer? Four. How about the 4004 processor? You tell me the answer, because I don’t know. Four? You can’t do anything with 3,000 people. So here we have GE, a big rust-belt industrial company, whose market cap has been in decline, deciding to take its 3,000 mediocre people and, say, build a software stack.

Now, $3 billion and 3,000 people later, I don’t believe they have one user in production. But I have 23 large-scale industry users in production around the world. IBM? What’s this thing they call “Watson?” Watson is an advertising fiction; it doesn’t exist. It’s a conglomeration of DB2 and a lot of professional services. There’s absolutely nothing there. So IBM and GE are spending hundreds and millions of dollars creating the market. The big sucking sound out there—which resulted in our bookings going up 600% last year—has been created by their marketing campaigns! IBM and GE are doing us a great service.

Q: Amazon is another kettle of fish, though. Jeff Bezos, its founder, runs the place. He’s got a startup mentality. He believes in lean teams. AWS, as you mentioned, came from 12 people.

Siebel: AWS is our largest marketing partner. We jointly sell with them worldwide. AWS IoT isn’t competitive with what we do, it’s complimentary. We leverage the entire AWS cloud to provide the services that we provide, so we jointly sell at every account worldwide. I’m on speed dial with Andy Jassy, Mike Clayville and Terry Wise. We work very cooperatively together.

Q: What makes IoT software a hard problem to solve?

Siebel: The integration. You need data-science tools to build big data and predictive-analytics capabilities, along with a platform for IoT applications. We knew it would be hard. But this is the business that we’re in. It all converges at IoT.

Q: Will IoT apps run on one big IoT platform, or will there be many varieties of platforms purpose-built for specific industries and companies?

Siebel: I think both things will prove to be true. We’re in the business of providing the platform to, say, aerospace companies and manufacturing companies so they can meet their own big data, predictive analytics and IoT services.

We’re also in the business of providing this to, say, health care companies that will be building a whole new generation of health care predictive analytics, which they will offer to the health care industry. We’re also in discussions with a large aerospace company to build a whole new family of big data, predictive analytics and IoT aerospace applications, which they’ll offer to the aerospace industry. So I don’t think these are mutually exclusive concepts at all.

Q: When I travel outside of Silicon Valley and talk with the ag industry or the auto-parts industry, I get the sense that outsiders think Silicon Valley lacks the vertical expertise.

Siebel: Exactly. The next generation of IoT apps in the aerospace industry will probably come from Honeywell, not Silicon Valley, because Honeywell might take a platform like ours and build a family of aerospace applications. Or a large health care company will build a large family of health care applications that they’ll offer to the health care industry.

Q: How many people do you have at C3 IoT

Siebel: We’re 130 people today. We’ll be 260 people in a year. We’re expanding in Asia and in Europe. And we’re expanding in North and South America.

Q: What’s the strategy behind that growth?

Siebel: The game that we’re playing, like that we played at Oracle in the 1980s and at Siebel Systems in the 1990s, is to see if we can establish and maintain a market-leadership position in providing platforms as a service for designing, developing, deploying, provisioning and operating large-scale big data, predictive analytics and IoT applications. As of April this year, I believe, we’re the largest provider in the world.

But it’s just like it is in every other rapidly growing emerging market—the next few years will be a land grab for market share. At Oracle we were able to achieve greater than 50% market share. At Siebel, I think, we had a 65% share in all of CRM worldwide by 2000. That’s the game we’re playing. We’re going to see if we can establish and maintain a market leadership position globally in this space. And, as I sit here today, I think we might do that.

Q: You’ve been pretty quiet about C3 IoT. But during the last six months, you’ve started talking more about it and your plans. Why?

Siebel: It took us seven years and a quarter-billion dollars to build this platform. Customers like it. Now we have a window to really grow.

Q: Why did it take seven years?

Siebel: We did it with a small group of very highly experienced programmers, many of whom I’ve worked with on two or three companies. Some of these people have been with me for three decades. But I knew it would take time to get this right. I’d always figured on a minimum of five years to market, but it took seven. We kept a very low profile until we had something credible to talk about. We have production customers all over the world, and I feel comfortable talking about it.

Q: Mark Zuckerberg once said that only young people can do great software. But you have a veteran team.

Siebel: We have a number of tried, tested and proven professionals with whom I’ve worked for many decades. Some go back to my Gain days in the 1990s, others to Siebel Systems.

Q: So you don’t buy into the idea that the half-life of talent is short.

Siebel: The group I’ve traveled with has built some pretty successful companies. And I believe we’ve added another one.

Q: Agreed. How did you raise the quarter billion?

Siebel: A quarter billion isn’t how much we’ve raised; it’s how much we’ve invested. And most of that came from customers; it didn’t come from capital.

Q: But you have raised outside capital.

Siebel: We’ve raised about $200 million, so far. We still have a lot of money in the bank. The first $20 million was raised in December of 2008. I sent an e-mail out on a Friday and had raised $20 million by Sunday. That was from a lot of people whom you and I both know pretty well. Following that, a number of customers invested. I’ve also invested quite a bit over the years.

Q: Who are some of those first-round investors?

Siebel: Don’t want to say. All are individuals. There are no institutional investors; they’re all private.

Q: Right.

Siebel: The first institutional investor was Sutter Hill. It came in early on, later during the first year. Then some customers invested. Then Echelon and Dow Chemical invested. TPG invested about $80 million not too long ago. Jim Breyer invested in the most recent round, with me and Bruce Cleveland. But the earliest investors, those who invested in that $20 million weekend round, I prefer not to name.

Q: Do you have any revenue goals for C3 IoT in five, ten years?

Siebel: We have very aggressive revenue goals. I don’t think C3 IoT will grow as rapidly as Siebel Systems grew … that grew from zero to $2 billion in revenues from 1993 to 1999. But I see it growing faster than Oracle, which grew at a 100% annual growth rate for its first 11 years. I think we can beat that.

Q: Speaking of Oracle … what is it about Oracle that accounts for its spinning off a lot of great entrepreneurs, you and Marc Benioff being the biggest successes?

Siebel: I think it has to do with the type of personality that they selected. Larry Ellison likes bright, type-A, think-outside-of-the-box-type people. But I also think, in a funny way, Oracle isn’t a place that encouraged a lot of internal entrepreneurism. So people who were entrepreneurs needed to go get that experience someplace else.

Q: How do you market and sell C3 IoT?

Siebel: We market to large multinational corporations. So our customer is typically between a $50 billion and $200 billion business that deals in health care, manufacturing, oil and gas, energy.

Q: Such companies are pretty easily identifiable. You don’t have to beat the bushes for prospects.

Siebel: We know who our prospects are. It’s easy for us to reach them, because we’ve done business with them for two, three or four decades. They know us, and they believe us to be credible. The sales cycle to sell to, say, Engie, which is a $76 billion integrated energy company in France, isn’t any longer than the sales cycle is to sell to the bakery. But when you’re done, you’ll have a transaction that’s a few orders of magnitude larger.