SIEBEL SYSTEMS INC, S-3, 2000-01-07

SIEBEL SYSTEMS INC
S-3, 2000-01-07
PREPACKAGED SOFTWARE

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As Filed with the Securities and Exchange Commission on January 7, 2000
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

SIEBEL SYSTEMS, INC.
(Exact Name of Registrant As Specified in Its Charter)

DELAWARE 94-3187233
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)

1855 South Grant Street
San Mateo, California 94402
(650) 295-5000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

Thomas M. Siebel
Chairman and Chief Executive Officer
Siebel Systems, Inc.
1855 South Grant Street
San Mateo, California 94402
(650) 295-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

Copies To:
Eric C. Jensen, Esq.
Wendy L. Lee, Esq.
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, California 94306
(650) 843-5000

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: From time to time after the
effective date of this registration statement.

If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. []

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]

If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. []__________________

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. []____________________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. []

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Offering Aggregate Amount of
Title of Shares to be Registered Amount to be Registered (1) Price per Share (2) Offering Price (2) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.001 3,319,561 $79.66 $264,436,229.26 $69,811.16
per share
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) This registration statement shall cover any additional shares of Siebel
Systems, Inc.'s ("Siebel") common stock which become issuable by reason of
any stock dividend, stock split, recapitalization or any other similar
transaction without receipt of consideration which results in an increase
in the number of shares of Siebel's outstanding common stock.

(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) of the Securities Act of 1933 based on the
average of the high and low sales prices of Siebel common stock as reported
on the Nasdaq National Market on January 4, 2000.

================================================================================

The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>

Explanatory Note

This registration statement contains a prospectus relating to a public
offering of an aggregate of 3,319,561 shares of common stock, $0.001 par value
per share, of Siebel Systems, Inc., a Delaware corporation ("Common Stock"),
that are owned by former stockholders of OnTarget, Inc., a Georgia corporation
(the "Offering"). The complete prospectus for the Offering follows immediately.
<PAGE>

The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.

Subject to Completion, Dated January 7, 2000

SIEBEL SYSTEMS, INC.

3,319,561 Shares

Common Stock

The Selling Stockholders: The selling stockholders identified in this
prospectus are selling 3,319,561 shares of our
common stock. We are not selling any shares of our
common stock under this prospectus and will not
receive any of the proceeds from the sale of
shares by the selling stockholders.

Offering Price: The selling stockholders may sell the shares of
common stock described in this prospectus in a
number of different ways and at varying prices. We
provide more information about how they may sell
their shares in the section titled "Plan of
Distribution" on page 24.

Trading Market: Our common stock is listed on the Nasdaq National
Market under the symbol "SEBL." On January 5,
2000, the closing sale price of our common stock,
as reported on the Nasdaq National Market, was
$74.56.

Risks: Investing in our common stock involves a high
degree of risk. See "Risk Factors" beginning on
page 3.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.

In connection with this offering, no person is authorized to give any
information or to make any representations not contained in this prospectus. If
information is given or representations are made, you may not rely on that
information or representations as having been authorized by us. This prospectus
is neither an offer to sell nor a solicitation of an offer to buy any securities
other than those registered by this prospectus, nor is it an offer to sell or a
solicitation of an offer to buy securities where an offer or solicitation would
be unlawful. You may not imply from the delivery of this prospectus, nor from
any sale made under this prospectus, that our affairs are unchanged since the
date of this prospectus or that the information contained in this prospectus is
correct as of any time after the date of this prospectus.

The date of this prospectus is __________, 2000

1.
<PAGE>

SUMMARY

The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this prospectus. Prospective investors should
consider carefully the information in this prospectus under the heading "Risk
Factors." Unless indicated otherwise, all share data is adjusted to reflect two-
for-one stock splits (each in the form of a 100% dividend) that occurred on each
of December 19, 1996, March 20, 1998 and November 12, 1999.

The Company

We are the market leader in web-based front office information systems for
organizations focused on increasing sales, marketing and customer service
effectiveness in field sales, telesales, telemarketing, retail, customer
service, call centers, field service, resellers, business partners and Internet-
based eCommerce, marketing and customer service. We design, develop, market and
support Siebel Front Office Applications, a leading web-based application
software product family designed to meet the sales, marketing and customer
service information system requirements of even the largest multi-national
organizations.

Our front office applications deliver the first entirely web-based family
of sales, marketing and customer service applications. The Siebel Front Office
allows organizations to manage, synchronize and coordinate all customer
interactions via the web, call center, field and business partner network. Our
front office applications fully support ActiveX, Java and HTML and can be
delivered over the Internet or via an organization's intranet, supporting
multiple desktop platforms.

Our products are also available in industry-specific versions designed for
the pharmaceutical, consumer goods, telecommunications, insurance and finance
vertical markets.

Our customers are comprised of global market leaders, known for delivering
the highest levels of quality in their products and services and for their
commitment to maintain the highest levels of customer satisfaction. Spanning
diverse industries and locations, our customers represent global organizations
of all sizes.

Deploying front office solutions is no longer viewed as a means of gaining
a competitive advantage, but rather is fundamental to an organization's ability
to survive. Employing front office applications technology to better manage
their customer relationships today, our customers continue to be the leaders in
their markets.

Our principal executive offices are located at 1855 South Grant Street, San
Mateo, CA 94402. Our telephone number is (650) 295-5000 and our e-mail address
is [email protected]. We also maintain an Internet home page at
"http://www.siebel.com".

Recent Events

At a special stockholders' meeting on October 20, 1999, our stockholders
approved an amendment to our certificate of incorporation to increase our
authorized number of shares of common stock from 300,000,000 to 800,000,000
shares.

On November 12, 1999 we effected a two-for-one stock split by way of a
stock dividend of one share of common stock for each share of common stock held
by each stockholder. All share data is adjusted to reflect the stock split.

On December 1, 1999, we acquired OnTarget, Inc. ("OnTarget"), a provider of
consulting services and training programs for sales and marketing organizations.
OnTarget will operate as a wholly owned subsidiary. Please refer to our Form 8-K
filed on December 15, 1999 for more information about the OnTarget acquisition.

2.
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RISK FACTORS

In addition to the other information contained in this prospectus,
investors should carefully consider the following risk factors in evaluating an
investment in our common stock. This prospectus includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. All statements other than statements of historical fact
are "forward-looking statements" for purposes of these provisions, including any
projections of earnings, revenues or other financial items, any statements of
the plans and objectives of management for future operations, any statements
concerning proposed new products or services, any statements regarding future
economic conditions or performance and any statement of assumptions underlying
any of the foregoing. In some cases, forward-looking statements can be
identified by the use of terminology such as "may," "will," "expects," "plans,"
"anticipates," "estimates," "potential," or "continue" or the negative thereof
or other comparable terminology. Although we believe that the expectations
reflected in the forward-looking statements contained herein are reasonable,
there can be no assurance that such expectations or any of the forward-looking
statements will prove to be correct and actual results could differ materially
from these projected or assumed in the forward-looking statements. Our future
financial condition and results of operations, as well as any forward-looking
statements, are subject to inherent risks and uncertainties, including but not
limited to the risk factors set forth below and for the reasons described
elsewhere in this prospectus. All forward-looking statements and reasons why
results may differ included in this prospectus are made as of the date hereof
and we assume no obligation to update any such forward-looking statement or
reason why actual results might differ.

Risks Related to Our Business

We have a limited operating history upon which to evaluate our business.

You should evaluate our prospects in light of the risks, expenses and
uncertainties that companies in their early stage of development frequently
encounter. We began operations in July 1993. We first shipped our Siebel Sales
Enterprise product in April 1995 and our Siebel Service Enterprise product in
December 1996. Subsequent versions of these products were first shipped in 1996
and 1997. Accordingly, we have a limited operating history upon which you may
evaluate our business and prospects.

Our net revenue and operating results may fluctuate.

We may experience a shortfall in revenue or earnings or otherwise fail to
meet public market expectations, which could materially adversely affect our
business and the market price of our common stock. Our net revenue and operating
results may fluctuate significantly because of a number of factors, many of
which are outside of our control. These factors include:

. Level of product and price competition;

. Length of our sales cycle and customer purchasing patterns;

. The size and timing of individual license transactions;

. Delay or deferral of customer implementations of our products;

. Success in expanding our customer support organization, direct sales
force and indirect distribution channels;

. Timing of new product introductions and product enhancements;

. Appropriate mix of products and services sold;

. Levels of international sales;

. Activities of and acquisitions by competitors;

3.
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. Timing of new hires and the allocation of our resources;

. Changes in the economy and foreign currency exchange rates; and

. Our ability to develop and market new products and control costs.

One or more of the foregoing factors may cause our operating expenses to be
disproportionately high during any given period or may cause our net revenue and
operating results to fluctuate significantly. Based upon the preceding factors,
we may experience a shortfall in revenue or earnings or otherwise fail to meet
public market expectations, which could materially adversely affect our
business, financial condition and the market price of our common stock.

Our quarterly operating results may fluctuate.

Our net revenue and operating results may vary drastically from quarter to
quarter. The main factors that may affect these fluctuations are:

. The discretionary nature of our customer's purchase and budget cycles;

. The size and complexity of our license transactions;

. The potential delays in recognizing revenue from license transactions;

. The timing of new product releases;

. Seasonal variations in operating results; and

. Variations in the fiscal or quarterly cycles of our customers.

Each customer's decision to implement our products and services is
discretionary, involves a significant commitment of resources and is subject to
their budget cycles. In addition, the timing of license revenue is difficult to
predict because of the length of our sales cycle, which has ranged to date from
two to eighteen months. We base our operating expenses on anticipated revenue
trends. Because a high percentage of these expenses are relatively fixed, a
delay in recognizing revenue from license transactions could cause significant
variations in operating results from quarter to quarter and could result in
operating losses. If these expenses precede, or are not subsequently followed
by, increased revenues, our operating results could be materially and adversely
affected. Although we have not experienced significant seasonal variations in
operating results, such variations could develop in the future.

As a result of these and other factors, revenues for any quarter are
subject to significant variation and we believe that period-to-period
comparisons of our results of operations are not necessarily useful. You should
not rely on these comparisons as indications of future performance. It is likely
that our future quarterly operating results from time to time will not meet the
expectations of market analysts or investors, which would likely have an adverse
effect on the price of our common stock.

We need to successfully integrate acquisitions and manage growth.

Our business strategy includes pursuing opportunities to grow our business,
both internally and through selective acquisitions, investments, joint ventures
and strategic alliances. Our ability to implement this strategy depends, in
part, on our success in making such acquisitions, investments, joint ventures
and strategic alliances on satisfactory terms and successfully integrating them
into our operations. Implementation of our growth strategy may impose
significant strains on our management, operating systems and financial
resources. Failure to manage this growth, or unexpected difficulties encountered
during expansion, could have an adverse effect on our business, operating
results and financial condition.

4.
<PAGE>

We rely on strategic relationships with systems integrators.

Failure to maintain existing strategic relationships with systems
integrators, or to establish new relationships in the future, could have a
material adverse effect on our business. We have established strategic
relationships with a number of organizations that we believe are important to
our sales, marketing and support activities, and the implementation of our
products. We believe that our relationships with these organizations provide
marketing and sales opportunities for our direct sales force and expand the
distribution of our products. These relationships allow us to keep pace with the
technological and marketing developments of major software vendors and provide
us with technical assistance for our product development efforts.

In particular, we have established a non-exclusive strategic relationship
with Andersen Consulting, one of our largest stockholders. We have also entered
into significant relationships with other third-party systems integrators such
as PricewaterhouseCoopers and Deloitte Consulting. A significant portion of our
revenues have historically been derived from customers for whom Andersen
Consulting, or another systems integrator with which we have a significant
relationship, have been engaged to provide system integration services. Any
deterioration of our relationship with these significant third-party systems
integrators could have a material adverse effect on our business, financial
condition and results of operations. We also have relationships with IBM
Corporation, Compaq Computer Corporation, Microsoft Corporation and Sun
Microsystems, among others. Failure to maintain existing relationships, or to
establish new relationships in the future, could have a material adverse effect
on our business, results of operations and financial condition.

Our current and potential customers may also rely on third-party systems
integrators to develop, deploy and/or manage Siebel Front Office Applications.
If we do not adequately train a sufficient number of system integrators, or if
these integrators do not have, or do not devote, the resources necessary to
implement our products, our business, operating results and financial condition
could be materially and adversely affected.

The Internet presents unique risks.

We may not be able to effectively compete in the Internet-related products
and services market. Siebel Front Office Applications communicate through public
and private networks over the Internet. The success of our products may depend,
in part, on our ability to continue developing products that are compatible with
the Internet. We cannot predict with any assurance whether the Internet will be
a viable commercial marketplace or whether the demand for Internet-related
products and services will increase or decrease in the future. The increased
commercial use of the Internet could require substantial modification and
customization of our products and the introduction of new products.

Critical issues concerning the commercial use of the Internet, including
security, demand, reliability, cost, ease of use, accessibility, quality of
service and potential tax or other government regulation, remain unresolved and
may affect the use of the Internet as a medium to support the functionality of
our products and distribution of our software. If these critical issues are not
favorably resolved, our business, operating results and financial condition
could be materially and adversely affected.

We operate in a competitive and rapidly changing market.

If the client-server and web-based applications markets fail to grow or
grow more slowly than we currently anticipate, our business, operating results
and financial condition could be materially and adversely affected. The market
for client-server and web-based application software is relatively new, highly
competitive and rapidly changing. We market our products only to customers who
have migrated or are in the process of migrating their enterprise computing
systems to client-server and web-based computing environments. Our future
financial performance will partly depend on the continued growth of
organizations successfully adopting client-server and web-based computing
environments.

Our customers may not successfully implement our products.

If existing customers have difficulty further deploying Siebel Front Office
Applications or for any other reason are not satisfied with Siebel Front Office
Applications, our business, operating results and financial condition could be
materially and adversely affected. Many of our customers purchase and implement
our products in phases. Our

5.
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customers frequently deploy our products to large numbers of sales, marketing
and customer service personnel. These end-users may not accept our products. Our
products are also being deployed on a variety of computer hardware platforms and
used with a number of third-party software applications and programming tools.
This use may present significant technical challenges, particularly as large
numbers of personnel attempt to use our product concurrently.

A limited number of products provides a substantial part of our license
revenues.

In 1998 and the first nine months of 1999, a substantial majority of our
license revenues were attributable to sales of Siebel Sales Enterprise, Siebel
Service Enterprise, Siebel Call Center and related products. We expect that such
products and related consulting, maintenance and training services will continue
to account for a majority of our future revenues. As a result, factors adversely
affecting the pricing of or demand for such products, such as competition or
technological change, could have a material adverse effect on our business,
operating results and financial condition.

The length of time required to engage a client and to implement our products may
be lengthy and unpredictable.

The timing of the sales and implementation of our products and services is
lengthy and not predictable with any degree of accuracy. You should not rely on
prior sales and implementation cycles as any indication of future cycles.

The license of our software products is often an enterprise-wide decision
by prospective customers and generally requires us to provide a significant
level of education to prospective customers regarding the use and benefits of
our products. In addition, the implementation of our products involves a
significant commitment of resources by prospective customers and is commonly
associated with substantial reengineering efforts that may be performed by the
customer or third-party systems integrators. The cost to the customer of our
product is typically only a portion of the related hardware, software,
development, training and integration costs of implementing a large-scale front
office software system. For these and other reasons, the period between initial
contact and the implementation of our products is often lengthy and is subject
to a number of factors that may cause significant delays, over many of which we
have little or no control. These factors include (i) the size and complexity of
the overall project and (ii) delays in our customers' implementation of web-
based computing environments. A delay in the sale or implementation of even a
limited number of license transactions could have a material adverse effect on
our business and operations and cause our operating results to vary
significantly from quarter to quarter.

Our success will require us to continue to expand our direct sales force and
technical support staff.

Failure to expand our direct sales force or technical and customer support
staff or to expand our distribution channels could materially and adversely
affect our business, operating results and financial condition. We have expanded
the distribution of our products in recent years. This expansion has placed new
and increased demands on our direct sales force and technical and sales support
staff. Our ability to achieve revenue growth in the future will depend, in part,
on our success in recruiting and training sufficient direct sales, technical and
customer support personnel. Although we invest significant resources to expand
our direct sales force and our technical and customer support staff, there is
only a limited number of qualified personnel in these areas. Therefore, we may
not be able to expand our direct sales force and technical support staff as
necessary to support our growing operations. In addition, such expansion may not
result in increased revenues.

Our expanding distribution may create additional risks.

Failure to minimize channel conflicts could materially and adversely affect
our business, operating results and financial condition. We have recently
entered into a number of relationships with resellers in order to obtain broad
market coverage. We have generally avoided exclusive relationships with
resellers of our products. Discount policies and reseller licensing programs are
intended to support each distribution channel with a minimum level of channel
conflicts.

6.
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Our revenue is concentrated in a relatively small number of customers.

Our success depends on maintaining relationships with our existing
customers. A relatively small number of customers have accounted for a
significant percentage of our revenues. For 1998, license revenues from our ten
largest customers accounted for 21% of total revenues. We expect that licenses
of our products to a limited number of customers will continue to account for a
significant percentage of revenue for the foreseeable future. The loss of a
small number of customers or any reduction or delay in orders by any such
customer, or failure to successfully market our products to new customers, could
have a material adverse effect on our business, financial condition and results
of operations.

Our continued success will require us to keep pace with technological
developments, evolving industry standards and changing customer needs.

The software market in which we compete is characterized by (i) rapid
technological change, (ii) frequent introductions of new products, (iii)
changing customer needs and (iv) evolving industry standards. To keep pace with
technological developments, evolving industry standards and changing customer
needs, we must support existing products and develop new products. We may not be
successful in developing, marketing and releasing new products or new versions
of the Siebel Front Office Applications that respond to technological
developments, evolving industry standards or changing customer requirements. We
may also experience difficulties that could delay or prevent the successful
development, introduction and sale of these enhancements. In addition, these
enhancements may not adequately meet the requirements of the marketplace and may
not achieve any significant degree of market acceptance. If release dates of any
future products or enhancements to the Siebel Front Office Applications are
delayed, or if these products or enhancements fail to achieve market acceptance
when released, our business, operating results and financial condition could be
materially and adversely affected. In addition, new products or enhancements by
our competitors may cause customers to defer or forego purchases of our
products, which could have a material adverse effect on our business, financial
condition and results of operations.

To be successful, we must effectively compete in the front office systems
market.

Our products target the front office systems market. This market is highly
competitive, rapidly changing and significantly affected by new product
introductions. We face competition primarily from our customers' internal
information technology departments and systems integrators, as well as from
other application software providers that offer a variety of products and
services to address this market. Many of our customers and potential customers
have attempted to develop front office systems in-house, either alone or with
the help of systems integrators. We may not be able to compete successfully
against such internal development efforts.

We rely on a number of systems consulting and systems integration firms for
a substantial portion of implementation and other customer support services, as
well as for recommendations of our products during the evaluation stage of the
purchase process. Although we seek to maintain close relationships with these
service providers, many of them have similar and often more established,
relationships with our competitors. If we are unable to develop and retain
effective, long-term relationships with these third parties, our competitive
position could be materially and adversely affected. Further, many of these
third parties have significantly greater resources than we do and may market
software products that compete with us.

A large number of personal, departmental, enterprise-wide and other
products exist in the front office software market. Companies (Products) such as
Symantec (ACT!), Borealis Corporation (Arsenal), Saratoga Systems (Avenue),
Aurum (BaanFrontOffice) (acquired by Baan Company N.V.), Corepoint (Corepoint
Field Sales, Corepoint Telesales), Clarify Inc. (ClearSales, ClearSupport), ONYX
(Customer Center), Epiphany (e.4 System), Silknet (eBusiness System), IMA
(EDGE), Rubric (EMA), Applix (Enterprise), Dendrite International, Inc. (Force
One), Marketrieve Company (Marketrieve PLUS), Firstwave Technologies, Inc.
(Netgain), Broadvision, Inc. (One-To-One Application System), Oracle Corporation
(Oracle Field Sales Online, Oracle Service and Oracle Call, Front Office
Application), Relavis (OverQuota), Pivotal Software, Inc. (Relationship), SAP AG
(Sales Force Automation Solution), SalesLogix (SalesLogix), Portera
(ServicePort), MEI (UniverSell), Exchange Applications (ValEX) and The Vantive
Corporation (Vantive Enterprise) (acquired by PeopleSoft Inc.) are among the
many firms in this market segment.

7.
<PAGE>

Some of these competitors have longer operating histories, significantly
greater financial, technical, marketing and other resources, significantly
greater name recognition and a larger installed base of customers than we do.
In addition, many competitors have well-established relationships with our
current and potential customers. As a result, these competitors may be able to
respond more quickly to new or emerging technologies and changes in customer
requirements, or to devote greater resources to the development, promotion and
sale of their products than we can.

There are many factors that may increase competition in the front office
systems market, including (i) entry of new competitors, (ii) alliances among
existing competitors, (iii) consolidation in the software industry and (iv)
technological changes or changes in the use of the Internet. Increased
competition may result in price reductions, reduced gross margins or loss of
market share, any of which could materially and adversely affect our business,
operating results and financial condition. If we cannot compete successfully
against current and future competitors or overcome competitive pressures, our
business, operating results and financial condition may be adversely affected.

If we do not maintain our relationships with third-party vendors, interruptions
in the supply of our products may result.

We may not be able to replace the functionality provided by the third-party
software currently offered with our products if that software becomes obsolete
or incompatible with future versions of our products or is not adequately
maintained or updated. Portions of our products incorporate software that was
developed and is maintained by third-party software developers. Although we
believe there are other sources for these products, any significant interruption
in the supply of these products could adversely impact our sales unless and
until we can secure another source. We depend in part on these third parties'
abilities to enhance their current products, to develop new products on a timely
and cost-effective basis and to respond to emerging industry standards and other
technological changes. The absence of or any significant delay in the
replacement of functionality provided by third-party software in our products
could materially and adversely affect our sales.

Software errors or defects in our products could reduce revenues.

Software products frequently contain errors or failures, especially when
first introduced or when new versions are released. Although we conduct
extensive product testing during product development, we have, in the past, been
forced to delay the commercial release of products until the correction of
software problems. We could lose revenues as a result of software errors or
defects. Our products are intended for use in sales applications that may be
critical to a customer's business. As a result, we expect that our customers and
potential customers will have a greater sensitivity to product defects than the
market for software products generally. Testing errors may also be found in new
products or releases after commencement of commercial shipments, resulting in
loss of revenue or delay in market acceptance, damage to our reputation, or
increased service and warranty costs, any of which could have a material adverse
effect upon our business, operating results and financial condition.

If we do not successfully manage our growth, our business may be negatively
impacted.

If we fail to manage our growth effectively, our business, financial
condition and results of operations could be materially and adversely affected.
Our business has grown rapidly in recent years. This growth has placed a
significant strain on our management systems and resources. To manage future
growth, we must continue to (i) improve our financial and management controls,
reporting systems and procedures on a timely basis and (ii) expand, train and
manage our employee work force.

The loss of key personnel could negatively affect our performance.

Our performance depends on the continued service of our key technical,
sales and senior management personnel, particularly Thomas M. Siebel, our
Chairman and Chief Executive Officer. None of our key employees has entered into
an employment agreement with us. The loss of the services of one or more of our
executive officers could have a material adverse effect on our business,
operating results and financial condition.

8.
<PAGE>

Substantial leverage and debt service obligations may adversely affect our cash
flow.

We have substantial amounts of outstanding indebtedness, primarily our 5-
1/2% convertible subordinated notes due September 15, 2006. As a result of this
indebtedness, our principal and interest payment obligations are substantial.
We may be unable to generate cash sufficient to pay the principal of, interest
on and other amounts due in respect of our indebtedness when due. We also expect
to add additional equipment loans and lease lines to finance capital
expenditures and may obtain additional long-term debt, working capital lines of
credit and lease lines. There can be no assurance that any financing
arrangements will be available.

Our substantial leverage could have significant negative consequences,
including:

. increasing our vulnerability to general adverse economic and industry
conditions;

. limiting our ability to obtain additional financing;

. requiring the dedication of a substantial portion of our expected cash
flow from operations to service our indebtedness, thereby reducing the
amount of our expected cash flow available for other purposes,
including capital expenditures;

. limiting our flexibility in planning for, or reacting to, changes in
our business and the industry in which we compete; and

. placing us at a competitive disadvantage compared to less leveraged
competitors and competitors that have better access to capital
resources.

The protection of our proprietary information is limited.

We rely primarily on a combination of patent, copyright, trade secret and
trademark laws, confidentiality procedures and contractual provisions to protect
our proprietary rights. We also believe that the technological and creative
skills of our personnel, new product developments, frequent product
enhancements, name recognition and reliable product maintenance are essential to
establishing and maintaining a technology leadership position. We seek to
protect our software, documentation and other written materials under patent,
trade secret and copyright laws, which afford only limited protection. Any
patents issued to us may be invalidated, circumvented or challenged. Any of our
pending or future patent applications, whether or not being currently
challenged, may not be issued with the scope of the claims we seek, if at all.
Furthermore, others may develop technologies that are similar or superior to our
technology or design around our patents. Despite our efforts to protect our
proprietary rights, unauthorized parties may attempt to copy aspects of our
products or to obtain and use information that we regard as proprietary.
Policing unauthorized use of our products is difficult. In addition, the laws of
some foreign countries do not protect our proprietary rights as fully as do the
laws of the United States. Our means of protecting our proprietary rights in the
United States or abroad may not be adequate. We have entered into agreements
with substantially all of our customers that require us to place Siebel Front
Office Applications source code into escrow. Such agreements generally provide
that such parties will have a limited, non-exclusive right to use such code if
(i) there is a bankruptcy proceeding by or against us, (ii) we cease to do
business, or (iii) we fail to meet our support obligations.

Although we do not believe that we are infringing any proprietary rights of
others, third parties may claim that we have infringed their intellectual
property rights. Furthermore, former employers of our former, current or future
employees may assert claims that such employees have improperly disclosed to us
the confidential or proprietary information of such former employers. Any such
claims, with or without merit, could (i) be time consuming to defend, (ii)
result in costly litigation, (iii) divert management's attention and resources,
(iv) cause product shipment delays and (v) require us to pay money damages or
enter into royalty or licensing agreements. A successful claim of product
infringement against us and our failure or inability to license or create a
workaround for such infringed or similar technology may materially and adversely
affect our business, operating results and financial condition.

We license certain software from third parties. These third-party software
licenses may not continue to be available to us on acceptable terms. The loss
of, or inability to maintain, any of these software licenses could result in
shipment delays or reductions. This could materially and adversely affect our
business, operating results and financial condition.

9.
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Year 2000 problems may cause an interruption in our business.

Many existing computer programs and systems use only two-digit fields to
identify the year, e.g. 85=1985 and they are unable to process date and time
information between the twentieth and twenty-first centuries. Accordingly,
computer programs and software may need to be modified prior to the year 2000 in
order to remain functional. Although we have spent a large amount of time and
resources to address potential Y2K problems, and are not aware of any Y2K
problems with respect to our programs and systems caused by the recent
commencement of the year 2000, there is no assurance that we will be successful
in our efforts to identify and address all Y2K issues that may arise in the
future. Failure to complete the necessary modifications in the event such issues
arise could cause a disruption or failure of our programs and systems.

International operations involve unique risks.

Our revenues are primarily derived from large multi-national companies. To
service the needs of these companies, we must provide worldwide product support
services. We have expanded and intend to continue expanding, our international
operations and enter additional international markets. This will require
significant management attention and financial resources that could adversely
affect our operating margins and earnings. We may not be able to maintain or
increase international market demand for Siebel Front Office Applications. If we
do not, our international sales will be limited and our business, operating
results and financial condition could be materially and adversely affected.

Our international operations are subject to a variety of risks, including
(i) foreign currency fluctuations, (ii) economic or political instability, (iii)
shipping delays and (iv) various trade restrictions. Any of these risks could
have a significant impact on our ability to deliver products on a competitive
and timely basis. Significant increases in the level of customs duties, export
quotas or other trade restrictions could also have an adverse effect on our
business, financial condition and results of operations. In situations where
direct sales are denominated in foreign currency, any fluctuation in foreign
currency or the exchange rate may adversely affect our business, financial
condition and results of operations. We manage our foreign currency exchange
rate risk by entering into contracts to sell foreign currency at the time a
foreign currency receivable is generated. When the foreign currency receivable
is collected, the contract is liquidated, thereby converting the foreign
currency to US dollars and mitigating the exchange rate risk. In certain
instances, we have not hedged foreign currency receivables when the forward
contracts in the relevant currency were not readily available or were not cost
effective.

Certain stockholders may be able to exercise control over matters requiring
stockholder approval.

Our current officers, directors and entities affiliated with us together
beneficially owned a significant portion of the outstanding shares of common
stock as of September 30, 1999. While these stockholders do not hold a majority
of our outstanding common stock, they will be able to exercise significant
influence over matters requiring stockholder approval, including the election of
directors and the approval of mergers, consolidations and sales of our assets.
This may prevent or discourage tender offers for our common stock.

Our stock price may continue to be volatile.

Our stock price has fluctuated substantially since our initial public
offering in June 1996. The trading price of our common stock is subject to
significant fluctuations in response to variations in quarterly operating
results, the gain or loss of significant orders, changes in earning estimates by
analysts, announcements of technological innovations or new products by us or
our competitors, general conditions in the software and computer industries and
other events or factors. In addition, the stock market in general has
experienced extreme price and volume fluctuations that have affected the market
price for many companies in industries similar or related to ours and that have
been unrelated to the operating performance of these companies. These market
fluctuations have adversely affected and may continue to adversely affect the
market price of our common stock.

Certain provisions in our charter documents may prevent certain corporate
actions.

Our Board of Directors is authorized to issue up to 2,000,000 shares of
preferred stock and to determine the price, rights, preferences, privileges and
restrictions, including voting rights, of those shares without any further
approval by our stockholders. The preferred stock could be issued with voting,
liquidation, dividend and other rights

10.
<PAGE>

superior to those of the common stock. The rights of the holders of common stock
will be subject to and may be adversely affected by, the rights of the holders
of any preferred stock that may be issued in the future. The issuance of
preferred stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could make it more difficult
for a third party to acquire a majority of our outstanding voting stock. We have
a classified Board of Directors. This and certain other provisions of our
certificate of incorporation and certain provisions of our Bylaws and of
Delaware law, could delay or make more difficult a merger, tender offer or proxy
contest.

11.
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WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission, the SEC, a
registration statement on Form S-3 to register the securities offered by this
prospectus. However, this prospectus does not contain all of the information
contained in the registration statement and the exhibits and schedules to the
registration statement. We strongly encourage you to carefully read the
registration statement and the exhibits and schedules to the registration
statement. We also file annual, quarterly and special reports, proxy statements
and other information with the SEC.

You may inspect and copy such material at the public reference facilities
maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, as well as at the SEC's regional offices at 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New
York, New York 10048. You may also obtain copies of such material from the SEC
at prescribed rates by writing to the Public Reference Section of the SEC, 450
Fifth Street, N.W., Washington, D.C. 20549.

Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the
SEC's web site at "http://www.sec.gov".

INCORPORATION BY REFERENCE

The SEC allows us to "incorporate by reference" the information contained
in documents that we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus.
Information in this prospectus supersedes information incorporated by reference
that we filed with the SEC prior to the date of this prospectus, while
information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we will make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934:

1. Our Annual Report on Form 10-K for the fiscal year ended December 31, 1998,
filed on March 31, 1999, including all material incorporated by reference
therein;

2. Our Definitive Revised Proxy Statement on Schedule 14A, filed on April 5,
1999;

3. Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1999, filed on May 14, 1999, including all material incorporated by
reference therein;

4. Our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
1999, filed on August 13, 1999, including all material incorporated by
reference therein;

5. Our Definitive Proxy Statement on Schedule 14A, filed on September 17,
1999;

6. Our Quarterly Report on Form 10-Q for the fiscal quarter ended September
30, 1999, filed on November 15, 1999, including all material incorporated
by reference therein;

7. Our Report on Form 8-K filed on December 15, 1999, including all material
incorporated by reference therein;

8. Our Report on Form 8-K filed on January 7, 2000, including all material
incorporated by reference therein;

9. All other reports filed by us pursuant to Section 13(a) or 15(d) of the
Exchange Act since December 31, 1998, including all material incorporated
by reference therein; and

10. The description of the common stock contained in our Registration Statement
on Form 8-A.

12.
<PAGE>

You may request a copy of these filings, at no cost to you, by writing or
telephoning us at: Siebel Systems, Inc. Attention: Investor Relations, 1855
South Grant Street San Mateo, California 94402 Telephone (650) 295-5000.

Our common stock is quoted on the Nasdaq National Market under the symbol
"SEBL." The last reported sales price of the common stock on the Nasdaq
National Market ("Nasdaq") on January 5, 2000 was $ 74.56 per share.

You should rely only on the information incorporated by reference or
provided in this prospectus. We have authorized no one to provide you with
different information. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of the shares of
common stock offered by the selling stockholders. See "Selling Stockholders."

BUSINESS

Overview

Our front office applications deliver the first entirely web-based family
of sales, marketing and customer service applications. The Siebel Front Office
allows organizations to manage, synchronize and coordinate all customer
interactions via the web, call center, field and business partner network.
Siebel front office applications fully support ActiveX, Java and HTML and can be
delivered over the Internet or via an organization's intranet, supporting
multiple desktop platforms.

Designed to run within a browser with no previously installed client-side
software, Siebel front office applications allow organizations to dramatically
reduce the cost of ownership for our applications and extend their reach
throughout the organization's network of third-party resellers and service
providers, business partners and customers (the organization's "extraprise").

Organizations configure our applications once and deploy them to mobile
laptop or handheld computers for field sales and service, in call centers, or
via the Internet to resellers and customers.

Our products are also available in industry-specific versions designed for
the pharmaceutical, consumer goods, telecommunications, insurance and finance
vertical markets.

Our customers are comprised of global market leaders, known for delivering
the highest levels of quality in their products and services and for their
commitment to maintaining the highest levels of customer satisfaction. Spanning
diverse industries and locations, our customers represent global organizations
of all sizes.

Through our global strategic alliances with industry-leading
organizations, we continue to enhance our Siebel Front Office product suite,
ensuring that we fully support our customers' technology requirements and
industry best practices today and in the future.

13.
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Products

Siebel 99.5, released in June 1999, brings the first entirely web-based
family of front office applications to market. Our web-based architecture and
diverse product offerings, are designed to provide support for sales, marketing
and customer service organizations and extends that support and seamlessly
unites, the organization's extraprise. This extended support not only enhances
communication between the organization and its customers but does so without
dependence on any particular method of communication.

Siebel Sales Enterprise

Siebel Sales Enterprise is designed to allow teams of sales and marketing
professionals to manage sales information throughout the entire sales cycle.
This core application includes the Opportunity Management, Account Management,
Contact Management, Activity Tracking, Message Broadcasting, Siebel Search,
Quotas and Incentives modules.

Siebel Sales Enterprise options, as of July 31, 1999, include Siebel
Quotes, Siebel Revenue Forecasting, Siebel Product Forecasting, Siebel Proposal
Generator, Siebel Presentations, Siebel Campaigns, Siebel Sales Assistant,
Siebel Target Account Selling, Siebel Customer Service Integration, Siebel
Product Configuration and Siebel Product Configuration Integration Object.

Siebel Service Enterprise

Siebel Service Enterprise enables teams of customer service, sales and
marketing professionals to ensure complete customer satisfaction by using
closed-loop, service request management capabilities. The base application
includes the Service Request Management, Account Management, Asset Tracking,
Contact Management, Activity Tracking, Message Broadcasting, Solution Management
and Siebel Search modules.

Siebel Service Enterprise options, as of July 31, 1999, include Siebel
Service Assistant, Siebel Quality Management and Siebel Mail Agent.

Siebel Field Service

Siebel Field Service extends upon Siebel's customer service solution and
provides field engineers with service functionality for entitlement/contracts
management, integration with other customer facing departments, dispatch and
scheduling, parts management and repair center operations. Siebel Field Service
provides a complete solution for the mobile technician as well as the connected
service agent.

Siebel Field Service options, as of July 31, 1999, include Siebel Service
Inventory, Siebel Shipping/Receiving, Siebel Logistics Manager, Siebel Repair,
Siebel Service Assistant, Siebel Quality Management and Siebel Mail Agent.

Siebel Call Center

Siebel Call Center provides blended Sales and Service functionality that
enables call center agents to provide both sales and customer service assistance
to customers. It accesses the power of Siebel Sales and Service Enterprise to
integrate all available customer information. This allows each service request
to result in additional sales opportunities and provides integrated sales and
service histories for each opportunity. This base application includes the
Opportunity Management, Service Request Management, Account Management, Asset
Tracking, Contact Management, Activity Tracking, Message Broadcasting, Solution
Management and Siebel Search modules.

Siebel Call Center options, as of July 31, 1999, include all of the options
available for both Siebel Sales Enterprise and Siebel Service Enterprise.

Siebel Marketing Enterprise

The Siebel Marketing Enterprise is designed to allow marketing
professionals, sales and service managers and business analysts to monitor
overall company performance and the effectiveness of company programs and

14.
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activities. Siebel Marketing Enterprise is designed to extract information from
Siebel Sales Enterprise, Siebel Service Enterprise and Siebel Call Center into a
customer data mart, designed for fast data analysis. Siebel Marketing Enterprise
is designed to include a broad range of pre-built analyses about customers,
sales pipeline, customer service, competitors, campaigns and products, allowing
managers and analysts to drill down into key operational details. Siebel
Marketing Enterprise also includes powerful database marketing capabilities that
allow marketing professionals to immediately develop multi-level campaigns that
are tailored to target specific market segments.

General product options are typically available on any of the Siebel
Enterprise Base applications and as of July 31, 1999, include Siebel Thin
Client, Siebel Encyclopedia, Siebel Office, Siebel Calendar, Siebel Reports,
Siebel Expense Reporting, Siebel Executive Information System, Siebel Incentive
Compensation, Siebel Order Entry, Siebel Contracts, Siebel SmartScript, Siebel
CTI, Siebel CTI Connect, Siebel Remote, Siebel Anywhere, Siebel Workflow
Manager, Siebel Assignment Manager, Siebel Data Quality, Siebel Professional
Services, Siebel Training and Siebel Advanced Search.

Siebel eBusiness

Siebel eBusiness allows organizations to interact directly with customers
and partners over the Internet. Using Siebel eBusiness, organizations can
immediately deploy scalable, secure and web-based applications for acquiring,
growing and retaining customers. Siebel eBusiness Applications include Siebel
eSales, Siebel eMarketing and Siebel eService.

Siebel eSales. Siebel eSales is a web-based application to support
unassisted business-to-business and business-to-consumer selling over the Web.
Siebel eSales includes a visual product catalog, web-based quote generation,
self-service solution configuration and on-line ordering. Siebel eSales options,
as of July 31, 1999, include Siebel eShopping Basket, Siebel eCatalog, Siebel
eConfigurator and Siebel eOrders.

Siebel eMarketing. Siebel eMarketing enables enterprises to create, execute
and assess web-based marketing campaigns. With Siebel eMarketing, enterprises
segment their customers and prospects; target them with a personalized,
automatically generated web- or email-based promotions; and create graphical
reports to assess the effectiveness and return-on-investment of the campaign.

Siebel eService. Through web- and email-based service automation, Siebel
eService allows organizations to manage the entire service process and to
provide world-class customer service and support via the Internet.

Siebel InterActive. Allows organizations to provide customized web-based
personalized briefings to partners and resellers over the web. Briefings include
key customer information including opportunities, accounts and contacts and on-
line content such as news and company profiles.

Industry Applications

Our products are available in industry-specific versions, all with similar
functionality, but each specifically designed for a particular industry.
Examples of our vertical products include:

. Siebel Pharma;

. Siebel Consumer Goods;

. Siebel Communications;

. Siebel Insurance;

. Siebel Finance; and

. Siebel Utilities.

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Product Development Expense

During 1996, 1997, 1998 and the nine-month period ended September 30, 1999,
we had product development expenses of $14.8 million, $26.7 million, $44.0
million and $58.3 million, respectively.

Professional Services

We provide implementation consulting and other technical services to
license customers through our worldwide professional services organization. We
provide these services in connection with similar services provided by certain
global alliance partners to provide the customer with the full array of services
necessary to install, integrate, customize and deploy Siebel Front Office
Applications.

Customer Support and Training

We offer a comprehensive, multi-tiered, integrated family of global support
programs designed to ensure successful implementation and customer satisfaction.
These programs include maintenance, technical support, professional services and
customer communications, as well as extensive educational offerings.

Marketing and Sales

In the United States, we market and sell our products and services
primarily through our direct sales and services organization. We have sales and
service professionals in 33 offices throughout the United States. Outside the
United States, we sell our products primarily through our direct sales and
services organization in the countries where we have an office. We have sales
and service professionals in 22 offices outside of the United States. We also
market and sell our products through distributors, primarily in Japan, Latin
America, South Africa and Asia.

Our ability to achieve significant revenue growth in the future will depend
in large part on our success in recruiting and training sufficient direct sales,
technical and customer support personnel and establishing and maintaining
relationships with our strategic partners. We believe the complexity of our
products and the large-scale deployment anticipated by our customers will
require a number of highly trained customer support personnel.

Our marketing and sales strategy includes the following key elements:

Target Large Multi-National Customers in a Broad Range of Industries

Our products are intended to be deployed on a global basis and provide
shared, up-to-date information for field sales, telemarketing, telesales,
marketing, customer service and third party reseller sales organizations. We
have a considerable number of large, multinational companies in our customer
base and intend to leverage our experience and continue to target sales and
marketing activities through our direct sales force to expand worldwide market
acceptance of Siebel Front Office Applications.

Maintain and Extend Advanced Technology Position

The Siebel Front Office Applications utilize advanced information
technology. We employ the use of configurable business objects (BusObjects) that
allow organizations to configure the Siebel application to fit their unique
needs while ensuring a clear and consistent upgrade path for future releases.
Our's web-centric, multi-tiered architecture is designed to enable large-scale
web, mobile and call center deployments with a single object metadata
repository. We have developed patented synchronization capabilities that allow
large numbers of mobile users to intermittently connect and synchronize their
local database with a server database. We have made extensive use of object
oriented component technology with extensible application program interfaces
(APIs) to enable seamless integration to other applications. We intend to
continue to commit substantial resources to maintain and extend our advanced
technology position.

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Global Strategic Alliances

Long-term strategic business partnerships with leading technology providers
continue to serve as a core component of our strategy to maintain our technology
and market leadership, consistently deliver superior customer satisfaction and
enable corporate growth.

We have partnered with best-of-class business and systems integrators,
hardware, software, support and training partners to ensure the successful
deployment of Siebel Front Office Applications. These strategic global
partnerships with industry leaders help ensure that we deliver comprehensive
solutions that completely meet our global customers' sales, marketing and
customer service information systems needs.

Promote Successful Customer Implementations

Our success is dependent upon our customers' successful implementation of
Siebel Front Office Applications. As a result, we actively support the
customer's deployment efforts by providing Internet and telephone technical
support, providing comprehensive instructor-led training and assigning an
account management team that consists of a sales representative, a technical
account manager and an executive sponsor. To objectively measure customer
satisfaction, we employ an independent third-party organization to perform
periodic customer satisfaction audits.

Expand Global Sales Capabilities

We intend to expand our global sales capabilities by increasing the size of
our direct sales organization in major markets and continuing to leverage
distributors in other selected markets. In particular, we plan to expand our
direct sales and marketing activities in Asia, Australia, Europe, South America
and North America. We have operations in Australia, Brazil, Canada, Colombia,
France, Germany, Italy, Japan, Mexico, the Netherlands, Norway, Sweden,
Switzerland, the United Kingdom and the United States and have introduced
localized versions of Siebel Front Office Applications for major European and
Asian markets. We are currently developing other localized versions, which will
be released as market conditions warrant.

During each of 1996, 1997, 1998 and the nine-month period ended
September 30, 1999, no individual customer accounted for more than 10% of
revenues. Export license sales for 1996, 1997, 1998 and the nine-month period
ended September 30, 1999 were $7.7 million, $41.8 million, $88.2 million and
$100.9 million, respectively. This represented 10%, 27%, 30% and 31% of total
license revenues, respectively.

Competition

The market for our products is intensely competitive, subject to rapid
change and significantly affected by new product introductions and other market
activities of industry participants. Our products are targeted at the emerging
market for sales, marketing and customer information systems. We face
competition from customers' internal development efforts, custom system
integration products, as well as other application software providers that offer
a variety of products and services designed to address this market. We believe
that the market for global front office information systems has historically not
been well served by the application software industry. We believe that most
customer deployments have been the result of large internal development
projects, custom solutions from systems integrators or the application of
personal and departmental productivity tools to the global enterprise.

Internal Development

Many of our customers and potential customers have in the past attempted to
develop sales, marketing and customer service information systems in-house,
either alone or with the help of systems integrators. Internal information
technology departments have staffed projects to build their own systems
utilizing a variety of tools. In some cases, such internal development projects
have been successful in satisfying the needs of an organization. However, since
software development, support and maintenance are not core competencies of these
organizations in some cases such projects are unsuccessful. The competitive
factors in this area require that we produce a product that conforms to the
customer's information technology standards, scales to meet the needs of large
enterprises, operates globally and costs less than the result of an internal
development effort. There can be no assurance that we will be able to compete
effectively against such internal development efforts.

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Custom System Integration Projects

A second source of competition results from system integrators engaged to
build a custom development application. The introduction of a system integrator
typically increases the likelihood of success for the customer. However, this
approach can be expensive as compared to the purchase of third party products
and typically results in a product that has not been designed to be supported,
maintained and enhanced by a focused software development company. Maintenance
and support for the custom code can become burdensome in future years, with
enhancements and modifications being cost-prohibitive. The competitive factors
in this area require that we demonstrate to the customer the cost savings and
advantages of a configurable, upgradeable and commercially-supported product
developed by a dedicated professional software organization.

We rely on system consulting and system integration firms for
implementation and other customer support services, as well as recommendations
of our products during the evaluation stage of the purchase process. Although we
seek to maintain close relationships with these service providers, many of these
third parties have similar and often more established, relationships with our
competitors. There can be no assurance that these third parties, many of which
have significantly greater resources than us, will not market software products
in competition with us in the future or will not otherwise reduce or discontinue
their relationships with or support of us and our products.

Other Competitors

A large number of personal, departmental and other products exist in the
front office applications market. Companies (Products) such as Silknet
(eBusiness System), Rubric (EMA), Exchange Applications, Portera (ServicePort),
Relavis (OverQuota), Symantec (ACT!), Saratoga Systems (Avenue), Epiphany (e.4
System), Clarify Inc. (ClearSales, ClearSupport), ONYX (Customer Center), IMA
(EDGE), Applix (Enterprise), Dendrite International, Inc. (Force One),
Marketrieve Company (Marketrieve PLUS), Firstwave Technologies, Inc. (Netgain),
Broadvision, Inc. (One-To-One Application System), Oracle Corporation (Oracle
Field Sales Online, Oracle Service and Oracle Call, Front Office Application),
Pivotal Software, Inc. (Relationship), SAP AG (Sales Force Automation Solution),
SalesLogix (SalesLogix), Aurum (BaanFrontOffice) (acquired by Baan Company
N.V.), MEI (UniverSell) and The Vantive Corporation (Vantive Enterprise)
(acquired by PeopleSoft Inc.) are among the many firms in this market segment.
Some of these competitors have longer operating histories, significantly greater
financial, technical, marketing and other resources, significantly greater name
recognition and a larger installed base of customers than us. In addition, many
competitors have well-established relationships with current and potential
customers of ours. As a result, these competitors may be able to respond more
quickly to new or emerging technologies and changes in customer requirements, or
to devote greater resources to the development, promotion and sale of their
products, than we can. We believe that we compete favorably in this marketplace
based on the following competitive advantages: breadth and depth of
functionality, a modern and enduring web-based product architecture, ability to
manage all customer interactions support across multiple channels, configurable
business objects, support for the global enterprise, scalability allowing
support for large user communities and strategic alignments with industry
leaders. In general, we have priced our products at or above those of our
competitors, which pricing we believe is justified by the scope of functionality
delivered and the performance characteristics afforded by our products.

It is also possible that new competitors or alliances among competitors may
emerge and rapidly acquire significant market share. We also expect that
competition will increase as a result of consolidation in the software industry.
Increased competition may result in price reductions, reduced gross margins and
loss of market share, any of which could materially and adversely affect our
business, operating results and financial condition. There can be no assurance
that we will be able to compete successfully against current and future
competitors or that competitive pressures faced by us will not materially and
adversely affect our business, operating results and financial condition.

Employees

As of September 30, 1999, we had a total of 2,516 employees, of which 1,974
were based in the United States, 3 in Argentina, 11 in Australia, 1 in Austria,
14 in Brazil, 3 in Colombia, 52 in Canada, 1 in Denmark, 51 in France, 74 in
Germany, 8 in Ireland, 10 in Italy, 30 in Japan, 11 in Malaysia, 7 in Mexico, 23
in the Netherlands, 2 in Norway, 1 in Portugal, 1 in Scotland, 14 in Spain, 4 in
Sweden, 8 in Switzerland and 213 in the United Kingdom. Of the total, 901 were
engaged in sales and marketing, 418 were in product development, 1,022 were in
customer support and professional services and 175 were in finance,
administration and operations. Our future performance

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depends in significant part upon the continued service of our key technical,
sales and senior management personnel, particularly Thomas M. Siebel, our
Chairman and Chief Executive Officer, none of whom is bound by an employment
agreement. The loss of the services of one or more of our key employees could
have a material adverse effect on our business, operating results and financial
condition. Our future success also depends on our continuing ability to attract,
train and retain highly qualified technical, sales and managerial personnel.
Competition for such personnel is intense and there can be no assurance that we
will be able to retain our key technical, sales and managerial personnel in the
future. None of our employees are represented by a labor union. We have not
experienced any work stoppages and consider our relations with our employees to
be good.

DESCRIPTION OF CAPITAL STOCK

We are authorized to issue up to 802,000,000 shares, $0.001 par value,
divided into two classes designated "common stock" and "preferred stock." Of
such shares authorized, 800,000,000 shares are designated as common stock and
2,000,000 are designated preferred stock.

Common Stock

As of January 4, 1999, there were 194,510,814 shares of common stock
outstanding that were held of record by approximately 710 record holders.

The holders of common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders. The holders of
common stock are not entitled to cumulative voting rights with respect to the
election of directors and as a consequence, minority stockholders will not be
able to elect directors on the basis of their votes alone. Subject to
preferences that may be applicable to any then outstanding shares of preferred
stock, holders of common stock are entitled to receive ratably such dividends as
may be declared by the Board of Directors out of funds legally available
therefor. In the event of a liquidation, dissolution or winding up of us,
holders of the common stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preference of any
then outstanding preferred stock. Holders of common stock have no preemptive
rights and no right their common stock into any other securities. There are no
redemption or sinking fund provisions applicable to the common stock.

Preferred Stock

Pursuant to our Certificate of Incorporation, the Board of Directors has
the authority, without further action by the stockholders, to issue up to
2,000,000 shares of preferred stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preferences,
sinking fund terms and the number of shares constituting any series or the
designation of such series, without any further vote or action by stockholders.
The issuance of preferred stock could adversely affect the voting power of
holders of common stock and the likelihood that such holders will receive
dividend payments and payments upon liquidation and could have the effect of
delaying, deferring or preventing a change in control of us. We have no present
plan to issue any shares of preferred stock.

Registration Rights

The holders of 31,012,405 (as of December 21, 1999) shares of common stock
are entitled to certain rights with respect to the registration of such shares
under the Securities Act pursuant to the Restated Investor Rights Agreement
among such holders and Siebel, dated December 1, 1995, as amended. Under the
terms of the agreement, if we propose to register any of our securities under
the Securities Act, either for our own account or for the account of other
security holders exercising registration rights, such holders are entitled to
notice of such registration and are entitled, subject to certain limitations, to
include shares therein. The holders may also require us to file a registration
statement under the Securities Act with respect to their shares and we are
required to use our best efforts to effect two such registrations. Furthermore,
the holders may require us to register their shares on Form S-3. Generally, we
are required to bear all registration and selling expenses incurred in
connection with any such registrations. These rights are subject to certain
conditions and limitations, among them the right of the underwriters of an
offering to limit the number of shares included in such registration. Such
registration rights terminate on September 19, 2003. The rights of the holders
under the agreement may be waived with the written consent of the

19.
<PAGE>

holders of at least a majority of the shares registrable thereunder. Such rights
have been waived in connection with this offering.

Anti-Takeover Effects of Provisions of Our Charter and Bylaws

Our certificate of incorporation provides for the Board of Directors to be
divided into three classes, with staggered three-year terms. As a result, only
one class of directors will be elected at each annual meeting of stockholders,
with the other classes continuing for the remainder of their respective
three-year terms. Stockholders have no cumulative voting rights and the
stockholders representing a majority of the shares of common stock outstanding
are able to elect all of the directors.

Our certificate of incorporation also requires that (a) any action required
or permitted to be taken by stockholders must be effected at a duly called
annual or special meeting of the stockholders and may not be effected by a
consent in writing and (b) the stockholders may amend our bylaws or adopt new
bylaws, only by the affirmative vote of 2/3 of the outstanding voting
securities. In addition, special meetings of the stockholders may be called only
by the Board of Directors, the Chairman of the Board or the Chief Executive
Officer. These provisions may have the effect of delaying, deferring or
preventing a change in control of us.

The classification of the Board of Directors and lack of cumulative voting
will make it more difficult for our existing stockholders to replace the Board
of Directors as well as for another party to obtain control of us by replacing
the Board of Directors. Since the Board of Directors has the power to retain and
discharge officers of Siebel, these provisions could also make it more difficult
for existing stockholders or another party to effect a change in management.

These and other provisions may have the effect of deterring hostile
takeovers or delaying changes in control or management of us. These provisions
are intended to enhance the likelihood of continued stability in the composition
of the Board of Directors and in the policies of the Board of Directors and to
discourage certain types of transactions that may involve an actual or
threatened change in control. These provisions are designed to reduce our
vulnerability to an unsolicited acquisition proposal. The provisions also are
intended to discourage certain tactics that may be used in proxy rights.
However, such provisions could have the effect of discouraging others from
making tender offers for our shares and, as a consequence, they also may inhibit
fluctuations in the market price of our shares that could result from actual or
rumored takeover attempts. Such provisions also may have the effect of
preventing changes in our management.

Section 203 of the Delaware General Corporation Law

We are subject to Section 203 or the Delaware General Corporation Law
("Section 203"), which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the time that such stockholder
became an interested stockholder, unless: (i) prior to such time, the board of
directors of the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested holder, (ii)
upon consummation of the transaction that resulted in the stockholder becoming
an interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding those shares owned (a) by persons who are directors and also
officers and (b) by employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or (iii) at or subsequent
to such time, the business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders and not by written
consent, by the affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested stockholder.

In general, Section 203 defines "business combination" to include: (i) any
merger or consolidation involving the corporation and the interested
stockholder, (ii) any sale, transfer, pledge or other disposition of 10% or more
of the assets of the corporation involving the interested stockholder, (iii)
subject to certain exceptions, any transaction that results in the issuance or
transfer by the corporation of any stock of the corporation to the interested
stockholder, (iv) any transaction involving the corporation that has the effect
of increasing the proportionate share of the stock or any class or series of the
corporation beneficially owned by the interested stockholder or (v) the receipt
by the interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits by or through the

20.
<PAGE>

corporation. In general, Section 203 defines "interested stockholder" as an
entity or person beneficially owning 15% or more of the outstanding voting stock
of the corporation and any entity or person affiliated with or controlling or
controlled by such entity or person. See "Risk Factors - Certain provisions in
our charter documents may prevent certain corporate actions."

21.
<PAGE>

SELLING STOCKHOLDERS

In connection with the acquisition of OnTarget in December of 1999, we
issued to the selling stockholders shares of our common stock, and we agreed to
register a number of shares of the common stock for resale. We also agreed to
use reasonable efforts to keep the registration statement effective until the
earliest of:

. the date the shares of common stock offered under this prospectus have
been sold to the public;

. the date one year from the date of the closing of the acquisition of
OnTarget (subject to adjustment in certain cases for delays in
filing); and

. in some cases, the date when all shares of common stock offered under
this prospectus may be sold in any three month period under Rule 144.

Our registration of the shares of common stock does not necessarily mean that
the selling stockholders will sell all or any of the shares.

The following table sets forth certain information regarding the beneficial
ownership of the common stock, as of January 7, 2000, of each of the selling
stockholders.

The information provided in the table below with respect to each selling
stockholder has been obtained from that selling stockholder. Except as otherwise
disclosed below, none of the selling stockholders has, or within the past three
years has had, any position, office or other material relationship with us.
Because the selling stockholders may sell all or some portion of the shares of
common stock beneficially owned by them, we cannot estimate the number of shares
of common stock that will be beneficially owned by the selling stockholders
after this offering. In addition, the selling stockholders may have sold,
transferred or otherwise disposed of, or may sell, transfer or otherwise dispose
of, at any time or from time to time since the date on which they provided the
information regarding the shares of common stock beneficially owned by them, all
or a portion of the shares of common stock beneficially owned by them in
transactions exempt from the registration requirements of the Securities Act of
1933.

Beneficial ownership is determined in accordance with Rule 13d-3(d)
promulgated by the Commission under the Securities Exchange Act of 1934. Unless
otherwise noted, each person or group identified possesses sole voting and
investment power with respect to shares, subject to community property laws
where applicable. None of the share amounts set forth below represents more than
1% of our outstanding stock as of January 7, 2000, adjusted as required by rules
promulgated by the SEC.

<TABLE>
<CAPTION>
Number of Shares
Selling Stockholder Beneficially Owned Shares Being Offered
- ------------------- ------------------- --------------------
<S> <C> <C>
J. Alston Gardner 1,779,997 1,601,997
The Gardner Family Grantor Retained Annuity Trust 307,752 276,977
Philip N. Rawlins 263,935 (1) 237,542
Wendy S. Lea 263,935 237,542
Nicholas J. Nascone 136,949 123,254
Fred R. Burton 80,785 72,706
Bradford Milner 19,157 17,241
Jeffrey S. Muir 136,103 (2) 122,493
Michael A. Waddell 27,698 24,928
Oberon Management, Ltd. 213,041 191,737
Fluvia Investments, Ltd. 213,041 191,737
Alun Newby 105,464 94,918
Barbara Kay Newby 45,199 40,679
Steve Hill 32,285 29,057
David Roberts 32,285 29,057
Stephen J. Bistritz 3,847 3,462
Deborah L. Gallagher 3,847 3,462
</TABLE>

22.
<PAGE>

<TABLE>
<S> <C> <C>
Mark B. Gardner 3,847 3,462
Donnie M. Hardison, Jr. 3,847 3,462
John W. Harris 3,847 3,462
Rod Jones 3,847 3,462
Robert J. Knight III 3,847 3,462
Jeff Friedler 3,847 3,462
</TABLE>

- --------------------------------------------------------------------------------

(1) Mr. Rawlins directly owns 231,862 shares of our common stock and
beneficially owns 32,073 shares of our common stock as trustee for the
Philip N. Rawlins 1999 Trust U/A 11/15/99.

(2) Mr. Muir directly owns 19,157 shares of our common stock and beneficially
owns: (a) 46,163 shares of our common stock as trustee for the U/A J.
Alston Gardner Trust dated 10/18/99, FBO Emma Gardner and Descendants; (b)
46,163 shares of our common stock as trustee for the U/A J. Alston Gardner
Trust dated 10/18/99, FBO Anna Gardner and Descendants; and (c) 24,620
shares of our common stock as trustee for The Nascone Family Grantor
Retained Annuity Trust U/A Nicholas J. Nascone 10/18/99.

23.
<PAGE>

PLAN OF DISTRIBUTION

The shares of common stock may be sold from time to time by the selling
stockholders in one or more transactions at fixed prices, at market prices at
the time of sale, at varying prices determined at the time of sale or at
negotiated prices. As used in this prospectus, "selling stockholders" includes
donees, pledgees, transferees and other successors in interest selling shares
received from a selling stockholder after the date of this prospectus as a gift,
pledge, partnership distribution or other non-sale transfer. The selling
stockholders may offer their shares of common stock in one or more of the
following transactions:

. on any national securities exchange or quotation service on which the
common stock may be listed or quoted at the time of sale, including the Nasdaq
National Market,

. in the over-the-counter market,

. in private transactions,

. through options,

. by pledge to secure debts and other obligations or

. a combination of any of the above transactions.

If required, we will distribute a supplement to this prospectus to
describe material changes in the terms of the offering.

The shares of common stock described in this prospectus may be sold from
time to time directly by the selling stockholders. Alternatively, the selling
stockholders may from time to time offer shares of common stock to or through
underwriters, broker/dealers or agents. The selling stockholders and any
underwriters, broker/dealers or agents that participate in the distribution of
the shares of common stock may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933. Any profits on the resale of shares of common
stock and any compensation received by any underwriter, broker/dealer or agent
may be deemed to be underwriting discounts and commissions under the Securities
Act of 1933. We have agreed to indemnify each selling stockholder against
certain liabilities, including liabilities arising under the Securities Act of
1933. The selling stockholders may agree to indemnify any agent, dealer or
broker-dealer that participates in the sale of shares of common stock described
in this prospectus against certain liabilities, including liabilities arising
under the Securities Act of 1933.

Any shares covered by this prospectus that qualify for sale pursuant to
Rule 144 under the Securities Act of 1933 may be sold under Rule 144 rather than
pursuant to this prospectus. The selling stockholders may not sell all of the
shares they hold. The selling stockholders may transfer, devise or gift such
shares by other means not described in this prospectus.

To comply with the securities laws of certain jurisdictions, the common
stock must be offered or sold only through registered or licensed brokers or
dealers. In addition, in certain jurisdictions, the shares of common stock may
not be offered or sold unless they have been registered or qualified for sale or
an exemption is available and complied with.

Under the Securities Exchange Act of 1934, any person engaged in a
distribution of the common stock may not simultaneously engage in market-making
activities with respect to the common stock for five business days prior to the
start of the distribution. In addition, each selling stockholder and any other
person participating in a distribution will be subject to the Securities
Exchange Act of 1934, which may limit the timing of purchases and sales of
common stock by the selling stockholders or any such other person. These factors
may affect the marketability of the common stock and the ability of brokers or
dealers to engage in market-making activities.

We entered into a registration rights agreement for the benefit of the
selling stockholders to register certain shares of our common stock held by such
selling stockholders under applicable federal and state securities laws and
under specific circumstances and at specific times. The registration rights
agreement provides for cross-indemnification of the selling stockholders and us
and their and our respective directors, officers and controlling

24.
<PAGE>

persons against specific liabilities in connection with the offer and sale of
the common stock, including liabilities under the Securities Act.

We will pay substantially all of the expenses incurred by the selling
stockholders incident to the offering and sale of the common stock.

LEGAL MATTERS

The validity of the common stock offered hereby is being passed upon for us
by Cooley Godward LLP, Palo Alto, California. James C. Gaither, a partner of
Cooley Godward LLP, is one of our directors. As of the date of this prospectus,
certain members and associates of Cooley Godward LLP beneficially own an
aggregate of 154,424 shares of our common stock.

EXPERTS

The historical and supplemental consolidated financial statements and
schedule of Siebel Systems, Inc. and subsidiaries as of December 31, 1997 and
1998, and for each of the years in the three-year period ended December 31,
1998, have been incorporated by reference herein, and in the registration
statement, in reliance upon the reports of KPMG LLP, independent auditors,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.

25.
<PAGE>

We have authorized no one to give any information or to make any representations
that are not contained in this prospectus. You should rely only on the
information provided in this prospectus or incorporated by reference therein.
You must not rely on any unauthorized information.

This prospectus does not offer to sell or buy any shares in any jurisdiction
where it is unlawful. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary............................................................... 2
Risk Factors.......................................................... 3
Where You Can Find More Information................................... 12
Incorporation by Reference............................................ 12
Use of Proceeds....................................................... 13
Business.............................................................. 13
Description of Capital Stock.......................................... 19
Selling Stockholders.................................................. 22
Plan of Distribution.................................................. 24
Legal Matters......................................................... 25
Experts............................................................... 25
</TABLE>

SIEBEL SYSTEMS, INC.

3,319,561 SHARES OF COMMON STOCK

_______________, 2000
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the common stock being registered. All the amounts shown are estimates except
for the registration fee and the Nasdaq National Market filing fee.

<TABLE>
<S> <C>
Registration fee................................................................. $ 69,811.16
Legal fees and expenses.......................................................... 25,000.00
Accounting fees and expenses..................................................... 150,000.00
Nasdaq National Market filing fee................................................ 17,500.00
Miscellaneous.................................................................... 5,000.00

TOTAL............................................................................ $267,311.16
===========
</TABLE>

Item 15. Indemnification of Officers and Directors.

Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify our directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933, as amended (the "Securities Act").

The Registrant's Certificate of Incorporation, as amended, provides for the
elimination of liability for monetary damages for breach of the directors'
fiduciary duty of care to the Registrant and its stockholders. These provisions
do not eliminate the directors' duty of care and, in appropriate circumstances,
equitable remedies such an injunctive or other forms of non- monetary relief
will remain available under Delaware law. In addition, each director will
continue to be subject to liability for breach of the director's duty of loyalty
to the Registrant, for acts or omissions not in good faith or involving
intentional misconduct, for knowing violations of law, for any transaction from
which the director derived an improper personal benefit and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision does not affect a director's responsibilities
under any other laws, such as the federal securities laws or state or federal
environmental laws.

The Registrant has entered into agreements with its directors and executive
officers that require the Registrant to indemnify such persons against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
(including expenses of a derivative action) in connection with any proceeding,
whether actual or threatened, to which any such person may be made a party by
reason of the fact that such person is or was a director or officer of the
Registrant or any of its affiliated enterprises, provided such person acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the Registrant and, with respect to any
criminal proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The indemnification agreements also set forth certain procedures that
will apply in the event of a claim for indemnification thereunder.

II-1.
<PAGE>

Item 16. Exhibits

(a) Exhibits.

Exhibit Description of the Document
Number

5.1 Opinion of Cooley Godward LLP (1)
23.1 Consent of KPMG LLP (1)
23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1) (1)
24.1 Power of Attorney (included in the signature page) (1)

(1) Filed herewith.

Item 17. Undertakings

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of The
Securities Act of 1933.

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement.

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.

(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

II-2.
<PAGE>

(4) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to provisions described in Item 15, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

II-3.
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Mateo, County of San Mateo, State of California
on January 7, 2000.

By: /s/ Thomas M. Siebel
-------------------------------------------
Thomas M. Siebel
Chairman and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Thomas M. Siebel and Howard H. Graham and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments, exhibits thereto and other documents in connection therewith) to
this registration statement and any subsequent registration statement filed by
the registrant pursuant to Securities and Exchange Commission Rule 462, which
relates to this registration statement and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys- in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated:

SIGNATURE TITLE DATE
- --------- ----- ----

/s/ Thomas M. Siebel Chairman and Chief Executive Officer January 7, 2000
- ------------------------
Thomas M. Siebel (Principal Executive Officer)

Senior Vice President Finance and January 7, 2000
Administration and Chief Financial
/s/ Howard H. Graham Officer (Principal Financial and
- ------------------------
Howard H. Graham Accounting Officer)

/s/ Eric E. Schmidt Director January 6, 2000
- ------------------------
Eric E. Schmidt

/s/ James C. Gaither Director January 6, 2000
- ------------------------
James C. Gaither

/s/ George T. Shaheen Director January 6, 2000
- ------------------------
George T. Shaheen

/s/ Charles R. Schwab Director January 6, 2000
- ------------------------
Charles R. Schwab

/s/ A. Michael Spence Director January 6, 2000
- ------------------------
A. Michael Spence

II-4

<PAGE>

EXHIBITS INDEX

Exhibit Description of the Document
Number

5.1 Opinion of Cooley Godward LLP (1)

23.1 Consent of KPMG LLP (1)

23.2 Consent of Cooley Godward LLP. (included in Exhibit 5.1) (1)

24.1 Power of Attorney (included in the signature page) (1)

(1) Filed herewith.

<PAGE>

EXHIBIT 5.1

[COOLEY GODWARD LLP LETTERHEAD]

January 7, 2000

Siebel Systems, Inc.
1855 South Grant Street
San Mateo, CA 94402

Re: Form S-3

Ladies and Gentlemen:

You have requested our opinion with respect to certain matters in connection
with the filing by Siebel Systems, Inc. (the "Company") of a Registration
Statement on Form S-3 (the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") covering the sale by certain selling
stockholders of 3,319,561 shares of the Company's common stock (the "Selling
Stockholder Shares").

In connection with this opinion, we have examined the Registration Statement,
the Company's Amended and Restated Certificate of Incorporation and Bylaws, each
as amended to date, and such other documents, records, certificates, memoranda
and other instruments as we deem necessary as a basis for this opinion. We have
assumed the genuineness and authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies thereof, and the due execution and delivery of all documents where due
execution and delivery are a prerequisite to the effectiveness thereof.

Our opinion is expressed only with respect to the federal laws of the United
States of America, the General Corporation Law of the State of Delaware and the
laws of the State of California. We express no opinion as to whether the laws of
any particular jurisdiction other than those identified above are applicable to
the subject matter hereof.

On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Selling Stockholder Shares are validly issued, fully paid and
nonassessable.

We consent to the reference to our firm under the caption "Legal Matters" in the
Prospectus included in the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.

Sincerely,

Cooley Godward LLP

By: /s/ Eric C. Jensen
---------------------------
Eric C. Jensen

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Siebel Systems, Inc.:

We consent to incorporation herein by reference of our reports dated
January 26, 1999, relating to the consolidated balance sheets of Siebel Systems,
Inc. and subsidiaries as of December 31, 1998 and 1997 and the related
consolidated statements of operations and comprehensive income (loss),
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1998 and the related schedule, which reports appear in
the December 31, 1998, annual report on Form 10-K of Siebel Systems, Inc. We
also consent to incorporation herein by reference of our reports dated December
1, 1999, relating to the supplemental consolidated balance sheets of Siebel
Systems, Inc. and subsidiaries as of December 31, 1997 and 1998, and the related
supplemental consolidated statements of operations and comprehensive income,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1998, and the related supplemental schedule, which
reports appear in the current report on Form 8-K dated January 7, 2000 of
Siebel Systems, Inc.

We consent to the reference to our firm under the heading "Experts" in the
registration statement.

/s/ KPMG LLP

Mountain View, California
January 6, 2000