**UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549**

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**FORM 10-Q**

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**[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended September 30, 1999**

**OR**

**[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934**

**For the transition period from ________to _________**

**Commission file number 0-20725**

**SIEBEL SYSTEMS, INC.**
(Exact name of Registrant as specified in its charter)



|**Delaware**                                                   | **94-3187233**                      
|-------------------------------------------------------------- | ------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification Number)

**1855 South Grant StreetSan Mateo, CA 94402**(Address of principal executive offices)

**(650) 295-5000**(Registrant's telephone number, including area code)







Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [  ]

The number of shares outstanding of the registrant's common stock, par value
            
      $.001 per share, as of November 4, 1999, was 94,530,886.







**SIEBEL SYSTEMS, INC.
                                    FORM 10-Q
                 For the Quarterly Period Ended September 30, 1999
                               Table of Contents**

**Part I.  Financial Information**

> Item  1.  Financial Statementsa)   Consolidated Balance Sheets
>                         as of September 30, 1999 and December 31, 1998b)   Consolidated Statements of Operations and Comprehensive Income (Loss)
>                         for the three and nine months ended September 30, 1999 and 1998c)   Consolidated Statements of Cash Flows
>                         for the nine months ended September 30, 1999 and 1998d)   Notes to Consolidated Financial Statements
> 
> 
> Item 2.   Management's Discussion and Analysis of Financial Condition and
>                    Results of OperationsItem 3.   Quantitative and Qualitative Disclosures About Market Risk

**Part II. Other Information**

> Item 1.   Legal ProceedingsItem 2.   Changes in Securities and Use of ProceedsItem 4:  Submission of Matters to a Vote of Security HoldersItem 6.   Exhibits and Reports on Form 8-K

**Signatures**

**Part I.  Financial Information**

Item  1.  Financial Statements

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**SIEBEL SYSTEMS, INC.****Consolidated Balance Sheets
                     (in thousands, except per share data; unaudited)**

`September 30,  December 31,
                                                            1999          1998
                                                       ------------  ------------
Assets

Current assets:
   Cash and cash equivalents.........................     $466,029       $79,961
   Short-term investments............................      158,593       151,888
   Marketable equity securities......................       46,503           --
   Accounts receivable, net..........................      213,664       122,818
   Deferred income taxes.............................       13,120        13,120
   Prepaids and other................................       19,649        13,908
                                                       ------------  ------------
     Total current assets............................      917,558       381,695

Property and equipment, net..........................       43,500        45,537
Other assets.........................................       19,820        14,714
                                                       ------------  ------------
     Total assets....................................     $980,878      $441,946
                                                       ============  ============

Liabilities and Stockholders' Equity

Current liabilities:
   Accounts payable..................................      $15,415        $3,899
   Accrued expenses..................................      105,725        84,917
   Income taxes payable..............................        9,986        10,917
   Deferred revenue..................................       63,259        50,875
   Deferred income taxes.............................       15,356           --
                                                       ------------  ------------
     Total current liabilities.......................      209,741       150,608

Convertible subordinated debentures....................    300,000           --
Deferred income taxes................................          243           710
                                                       ------------  ------------
     Total liabilities...............................      509,984       151,318
                                                       ------------  ------------
Stockholders' equity:
  Common stock; $0.001 par value; 300,000
   shares authorized; 93,202 and 89,630 shares
   issued and outstanding, respectively..............           93            90
  Additional paid-in capital.........................      312,881       235,302
  Notes receivable from stockholders.................         (406)         (406)
  Deferred compensation..............................         (748)         (360)
  Accumulated other comprehensive income (losses)....       25,208          (669)
  Retained earnings..................................      133,866        56,671
                                                       ------------  ------------
     Total stockholders' equity......................      470,894       290,628
                                                       ------------  ------------
     Total liabilities and stockholders' equity......     $980,878      $441,946
                                                       ============  ============`

See accompanying notes to consolidated financial statements.

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**SIEBEL SYSTEMS, INC.****Consolidated Statements of Operations and Comprehensive Income (Loss)
               (in thousands, except per share data; unaudited)**

`Three Months Ended  Nine Months Ended
                                             September 30,       September 30,
                                          ------------------- -------------------
                                             1999      1998      1999      1998
                                          --------- --------- --------- ---------
Revenues:
  Software............................... $125,951   $77,225  $329,388  $200,567
  Professional services, maintenance
   and other.............................   69,366    26,969   164,395    67,815
                                          --------- --------- --------- ---------
      Total revenues.....................  195,317   104,194   493,783   268,382
                                          --------- --------- --------- ---------
Cost of revenues:
  Software...............................    1,510       993     5,111     4,295
  Professional services, maintenance
   and other.............................   46,942    16,698   105,620    42,730
                                          --------- --------- --------- ---------
      Total cost of revenues.............   48,452    17,691   110,731    47,025
                                          --------- --------- --------- ---------
      Gross margin.......................  146,865    86,503   383,052   221,357

Operating expenses:
  Product development....................   16,532    11,572    50,160    30,862
  Sales and marketing....................   71,037    47,242   183,595   122,163
  General and administrative.............   12,342     6,915    31,949    17,724
  Merger related expenses................      --        --        --     13,500
                                          --------- --------- --------- ---------
      Total operating expenses...........   99,911    65,729   265,704   184,249
                                          --------- --------- --------- ---------
      Operating income...................   46,954    20,774   117,348    37,108
Other income, net........................    2,804     1,548     7,158     4,476
                                          --------- --------- --------- ---------
      Income before income taxes.........   49,758    22,322   124,506    41,584
Income taxes.............................   19,655     8,259    47,311    18,583
                                          --------- --------- --------- ---------
      Net income ........................  $30,103   $14,063   $77,195   $23,001
                                          ========= ========= ========= =========

Diluted net income per share.............    $0.27     $0.14     $0.71     $0.23
                                          ========= ========= ========= =========

Shares used in diluted net income
 per share computation...................  111,196   100,348   108,703    99,765
                                          ========= ========= ========= =========

Basic net income per share...............    $0.32     $0.16     $0.84     $0.26
                                          ========= ========= ========= =========

Shares used in basic net income
 per share computation...................   92,761    88,048    91,517    87,075
                                          ========= ========= ========= =========

Comprehensive income (loss):
      Net income ........................  $30,103   $14,063   $77,195   $23,001

      Other comprehensive income (loss),
       net of tax:
          Foreign currency translation
           adjustments...................      465       224       726      (138)
          Unrealized gains (losses) on
           available-for-sale securities.  (10,213)     --      25,151       --
                                          --------- --------- --------- ---------
Other comprehensive income (loss)........   (9,748)      224    25,877      (138)
                                          --------- --------- --------- ---------
      Total comprehensive income (loss)..  $20,355   $14,287  $103,072   $22,863
                                          ========= ========= ========= =========`

See accompanying notes to consolidated financial statements.

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**SIEBEL SYSTEMS, INC.****Consolidated Statements of Cash Flows
                           (in thousands; unaudited)**

`Nine Months Ended
                                                                September 30,
                                                          ----------------------
                                                              1999        1998
                                                          ----------  ----------
Cash flows from operating activities:
   Net income............................................   $77,195     $23,001
   Adjustments to reconcile net income to net cash
    provided by operating activities:
       Compensation related to stock options.............       151         193
       Depreciation and amortization.....................    14,899       7,969
       Loss on disposal of property and equipment........       714         242
       Provision for doubtful accounts and returns.......     4,938       3,964
       Changes in operating assets and liabilities:
         Accounts receivable.............................   (95,784)    (50,454)
         Prepaids and other..............................    (5,741)       (563)
         Accounts payable................................    11,516       1,377
         Accrued expenses................................    20,808      41,930
         Income taxes payable............................    32,644       5,010
         Deferred revenue................................    12,384      23,139
                                                          ----------  ----------

           Net cash provided by operating activities.....    73,724      55,808
                                                          ----------  ----------
Cash flows from investing activities:
   Purchases of property and equipment...................   (24,919)    (15,837)
   Proceeds from sale of property and equipment..........    13,225          --
   Purchases of short-term investments...................   (78,437)    (92,922)
   Sales and maturities of short-term investments........    70,937      64,583
   Other assets..........................................    (3,739)      2,514
                                                          ----------  ----------

           Net cash used in investing activities.........   (22,933)    (41,662)
                                                          ----------  ----------
Cash flows from financing activities:
   Proceeds from issuance of convertible
     subordinated debentures.............................   300,000          --
   Payment of debt issuance costs........................    (8,250)         --
   Proceeds from issuance of common stock................    43,527      25,492
                                                          ----------  ----------

           Net cash provided by financing activities.....   335,277      25,492
                                                          ----------  ----------
Change in cash and cash equivalents......................   386,068      39,638
Adjustment to conform acquired company's year end........        --      (4,140)
Cash and cash equivalents, beginning of period...........    79,961      70,202
                                                          ----------  ----------
Cash and cash equivalents, end of period.................  $466,029    $105,700
                                                          ==========  ==========
Supplemental disclosures of cash flow information:

 Cash paid for income taxes..............................   $14,667      $3,154
                                                          ==========  ==========

 Tax benefit from exercise of stock options..............   $33,575      $8,061
                                                          ==========  ==========`

See accompanying notes to consolidated financial statements.

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**SIEBEL SYSTEMS, INC.****NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)**

**1.      Summary of Significant Accounting Policies**

The accompanying unaudited consolidated financial statements have
been prepared on substantially the same basis as the audited
consolidated financial statements, and in the opinion of management
include all adjustments, consisting only of normal recurring
adjustments, necessary for their fair presentation.  The interim
results presented are not necessarily indicative of results for any
subsequent quarter or for the year ending December 31, 1999.

In May 1998, Siebel Systems, Inc. (the "Company") acquired Scopus
Technology, Inc. ("Scopus") in a merger transaction accounted for as a
pooling of interests. Accordingly, all financial information has been
restated to reflect the combined operations of the two companies. See
Note 2.

**Principles of Consolidation**

The accompanying consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All
intercompany accounts and transactions have been eliminated.

**Revenue Recognition**

The Company recognizes revenue in accordance with Statement of
Position ("SOP") 97-2 "Software Revenue Recognition."  Revenue from
software licenses is recognized under SOP No. 97-2 when persuasive
evidence of an arrangement exists and delivery has occurred, provided
the fee is fixed and determinable, collectibility is probable and the
arrangement does not require significant customization of the software.
 Revenue on multiple element arrangements is allocated to the various
elements based on fair values specific to the Company.

Professional services, maintenance and other revenues relate
primarily to consulting services, maintenance and training. Maintenance
revenues are recognized ratably over the term of the maintenance
contract, typically 12 months. Consulting and training revenues are
recognized as the services are performed and are usually on a time and
materials basis.  Such services primarily consist of implementation
services related to the installation of the Company's products and do
not include significant customization to, or development of, the
underlying software code.

**Cost of Revenues**

Cost of software consists primarily of media, product packaging,
documentation and other production costs, and third-party royalties.

Cost of professional services, maintenance and other consists
primarily of salaries, benefits and allocated overhead costs related to
consulting, training and customer support personnel, including cost of
services provided by third party consultants engaged by the Company.

**Use of Estimates**

The preparation of consolidated financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

**Cash and Cash Equivalents, Short-Term Investments and Marketable Equity  Securities**

The Company considers all highly liquid investments with a
remaining maturity of 90 days or less at the date of purchase to be
cash equivalents.  Short-term investments generally consist of highly
liquid debt securities with remaining maturities in excess of 90 days.
 Marketable equity securities include an investment in a publicly
traded company.   The Company has classified its short-term investments
and marketable equity securities as "available-for-sale."  Such
investments are carried at fair value with unrealized gains and losses,
net of related tax effects, reported within accumulated other
comprehensive income.  Realized gains and losses on available-for-sale
securities are computed using the specific identification method.

**Property and Equipment**

Property and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation is calculated using the
straight-line method over the estimated useful lives of the respective
assets, generally three to five years. Leasehold improvements are
amortized over the lesser of the lease term or the estimated useful
lives of the improvements, generally seven years.

**Software Development Costs**

Software development costs associated with new products and
enhancements to existing software products are expensed as incurred until
technological feasibility in the form of a working model has been
established. To date, the time period between the establishment of
technological feasibility and completion of software development has been
short, and no significant development costs have been incurred during
that period.  Accordingly, the Company has not capitalized any software
development costs to date.

**Intangible Assets**

Included in other assets are various intangible assets, primarily
goodwill related to acquisitions.  These amounts are being amortized over
a three-year period using the straight-line method.  Gross intangible
assets were $7,680,000 and $7,162,000 at September 30, 1999 and December
31, 1998, respectively, and the related accumulated amortization was
$2,634,000 and  $800,000 at September 30, 1999 and December 31, 1998,
respectively.

**Advertising**

Advertising costs are expensed as incurred. Advertising expense is
included in sales and marketing expense and amounted to $16,735,000 and
$6,324,000 for the nine months ended September 30, 1999 and 1998,
respectively.

**Income Taxes**

The Company uses the asset and liability method of accounting for
income taxes.  Deferred tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences between the
consolidated financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets are
recognized for deductible temporary differences, net operating loss
carryforwards and credit carryforwards if it is more likely than not that
the tax benefits will be realized. To the extent a deferred tax asset
cannot be recognized under the preceding criteria, allowances must be
established. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled.

**Net Income Per Share**

Basic earnings per share is computed using the weighted average
number of shares of common stock outstanding. Diluted earnings per share
is computed using the weighted average number of shares of common stock
and, when dilutive, common equivalent shares from options to purchase
common stock and warrants outstanding using the treasury stock method.
Diluted earnings per share also gives effect, when dilutive, to the
conversion of the convertible subordinated debentures, using the if-
converted method.

**Employee Stock Option and Purchase Plans**

The Company accounts for its stock-based compensation plans using the
intrinsic value method. As such, compensation expense is recorded on the
date of grant if the current market price of the underlying stock exceeds
the exercise price.

**Foreign Currency Translation**

The Company considers the functional currency of its foreign
subsidiaries to be the local currency, and accordingly, the financial
statements of the foreign subsidiaries are translated into U.S. dollars
using exchange rates in effect at period end for assets and liabilities
and average exchange rates during each reporting period for the results
of operations. Adjustments resulting from translation of foreign
subsidiary financial statements are reported within accumulated other
comprehensive income.  To date, the related tax effects have not been
significant.

The Company generally utilizes foreign currency forward contracts to
hedge its exchange risk on foreign currency receivable and intercompany
balances.  While these forward contracts are subject to fluctuations in
value, which are recorded in current results of operations, such
fluctuations are generally offset by the changes in value of the
underlying exposures being hedged.  The Company does not hold or issue
financial instruments for speculative or trading purposes.

**Concentrations of Credit Risk**

Financial instruments that potentially subject the Company to a
concentration of credit risk principally consist of trade accounts
receivable. The Company performs ongoing credit evaluations of its
customers and generally does not require collateral on accounts
receivable, as the majority of the Company's customers are large, well
established companies. The Company maintains reserves for potential
credit losses, but historically has not experienced any significant
losses related to any particular industry or geographic area since the
Company's business is not concentrated on any one particular customer or
customer base.  No single customer accounts for more than 10% of
revenues; and the Company's largest customer base, high technology, which
accounted for approximately 24% of revenues during the nine months ended
September 30, 1999, is sufficiently broad that the Company does not
consider itself significantly exposed to concentrations of credit risk.

**Fair Value of Financial Instruments**

The carrying amounts of the Company's cash and cash equivalents,
short-term investments, accounts receivable, and accounts payable
approximate their respective fair values.  Changes in the fair value of
the Company's derivative financial instruments (foreign currency forward
contracts) are generally offset by changes in the value of the underlying
exposures being hedged.  The fair value of the Company's derivative
financial instruments at September 30, 1999 was a loss of approximately
$882,000.

**Impairment of Long-Lived Assets**

The Company evaluates long-lived assets, including goodwill, for
impairment whenever events or changes in circumstances indicate that the
carrying value of an asset may not be recoverable based on expected
undiscounted cash flows attributable to that asset.  The amount of any
impairment is measured as the difference between the carrying value and
the fair value of the impaired asset.  The Company does not have any
long-lived assets it considers to be impaired.

**Recent Accounting Pronouncements**

In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133 "Accounting for Derivative Instruments and Hedging Activities".
SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded
in other contracts, (collectively referred to as derivatives) and for
hedging activities.  It requires that an entity recognize all derivatives
as either assets or liabilities in the statement of financial position
and measure those instruments at fair value.  If certain conditions are
met, a derivative may be specifically designated and accounted for as (a)
a hedge of the exposure to changes in the fair value of a recognized
asset or liability or an unrecognized firm commitment, (b) a hedge of the
exposure to variable cash flows of a forecasted transaction, or (c) a
hedge of the foreign currency exposure of a net investment in a foreign
operation, an unrecognized firm commitment, an available-for-sale
security, or a foreign-currency-denominated forecasted transaction.  For
a derivative not designated as a hedging instrument, changes in the fair
value of the derivative are recognized in earnings in the period of
change.  This statement will be effective for all annual and interim
periods beginning after June 15, 2000.  Management does not believe the
adoption of SFAS No. 133 will have a material effect on the Company's
consolidated financial position or results of operations.

In December 1998, the Accounting Standards Executive Committee
(AcSEC) of the AICPA issued SOP 98-9, "Software Revenue Recognition with
Respect to Certain Arrangements", which requires recognition of revenue
using the "residual method" in a multiple element arrangement when fair
value does not exist for one or more of the undelivered elements in the
arrangement.  Under the "residual method", the total fair value of the
undelivered elements is deferred and subsequently recognized in
accordance with SOP 97-2.  Management does not believe the adoption of
SOP 98-9 will have a material effect on the Company's consolidated
financial position or results of operations.  SOP 98-9 will be effective
for the Company for all annual and interim periods beginning on and after
January 1, 2000.

**2.      Scopus Merger**

In May 1998, the Company completed the acquisition of Scopus, a
leading provider of customer service, field service, and call center
software solutions. Under the terms of the agreement, each outstanding
share of Scopus common stock was exchanged for newly issued shares of
common stock of the Company. This resulted in the issuance of
approximately 15.1 million additional shares of the Company's Common
Stock. In addition, all outstanding stock options of Scopus were
converted into the right to acquire the Company's Common Stock at the
same exchange ratio with a corresponding adjustment to the exercise
price. In connection with the merger, the Company incurred direct merger-
related expenses of approximately $13,500,000 consisting of direct
transaction fees for investment bankers, attorneys, accountants and other
professional fees of $9,100,000, integration charges related to duplicate
facilities and equipment of $3,100,000 and other miscellaneous expenses
of $1,300,000.  The Company also incurred indirect merger-related
expenses of approximately $1,800,000 for joint sales training and merger-
related marketing costs, which are included within sales and marketing
expenses.

The transaction has been accounted for as a pooling of interests.
Accordingly, the financial statements of Siebel have been restated to
include the financial position and results of operations of Scopus for
all periods presented. Prior to the merger with Siebel, Scopus ended its
fiscal year on March 31. The restated financial statements as of December
31, 1997, and for prior periods, include Siebel's results of operations
for those periods and Scopus' results of operations for the fiscal period
ending three months later. Beginning January 1, 1998, the reporting
periods of Siebel and Scopus were conformed, and results of operations
were combined for the calendar periods presented.

The results of operations for the separate companies and the combined
amounts presented in the consolidated financial statements follow (in
thousands, unaudited):

`Three months
                                       ended
                                     March 31,
     (in thousands, unaudited)          1998
                                    ------------
   Total revenues:
       Siebel.....................      $47,100
       Scopus.....................       27,072
                                    ------------
                                        $74,172
                                    ============

   Net income:
       Siebel.....................       $8,284
       Scopus.....................        1,464
                                    ------------
                                         $9,748
                                    ============`

**3.      Net Income Per Share**

The following is a reconciliation of the number of shares used in the
basic and diluted earnings per share computations for the periods
presented (in thousands, unaudited):

`Three Months Ended  Nine Months Ended
                                             September 30,       September 30,
                                          ------------------- -------------------
(in thousands, unaudited)                    1999      1998      1999      1998
                                          --------- --------- --------- ---------
Shares used in basic net income
 per share computation...................   92,761    88,048    91,517    87,075
Effect of dilutive potential common
 shares..................................   18,435    12,300    17,186    12,690
                                          --------- --------- --------- ---------
Shares used in diluted net income
 per share computation...................  111,196   100,348   108,703    99,765
                                          ========= ========= ========= =========`

The Company excludes potentially dilutive securities from its diluted
net income per share computation when either the exercise price of the
securities exceeds the average fair value of the Company's common stock
for the period or the Company reported net losses during the period
because their effect would be anti-dilutive.  For the nine months ended
September 30, 1999, the Company excluded 1,476,130 employee stock options
with a weighted average exercise price of $58.98 per share from the
earnings per share computation as their exercise prices exceeded the
average fair value of the Company's common stock during such period and,
accordingly, their inclusion would have been anti-dilutive. For the three
and nine months ended September 30, 1998, the Company excluded 1,878,161
and 2,640,541 employee stock options, respectively, with a weighted
average exercise price of $30.42 and $29.36 per share, respectively, from
the earnings per share computation.  For the three months ended September
30, 1999, the Company did not exclude any employee stock options from the
earnings per share computation as the average fair value of the Company's
common stock during such period exceeded their exercise prices.  For the
three and nine months ended September 30, 1999, the Company excluded the
convertible subordinated debentures from the earnings per share
computation as the effect would be antidilutive.

**4.      Segment and Geographic Information**

The Company and its subsidiaries are principally engaged in the
design, development, marketing and support of Siebel Front Office
Applications, its family of proprietary software applications.
Substantially all revenues result from the licensing of the Company's
software products and related consulting and customer support
(maintenance) services.  The Company's chief operating decision maker
reviews financial information presented on a consolidated basis,
accompanied by disaggregated information about revenues by geographic
region for purposes of making operating decisions and assessing financial
performance.  Accordingly, the Company considers itself to be in a single
industry segment, specifically the license, implementation and support of
its software applications.

**5.      Commitments and Contingencies**

In March 1999, the Company entered into a security agreement with a
bank to collateralize certain letters of credit issued by the bank on
behalf of the Company.  Letters of credit for $8,400,000, expiring
October 2001, have been issued under this agreement.

**6.      Convertible Subordinated Notes**

The Company completed a private placement of $300,000,000 of
convertible subordinated notes in September 1999.  The seven-year  term
 notes bear interest at a rate of 5.50 percent per annum and are
convertible into shares of the Company's common stock at any time prior
to maturity at a conversion price of approximately $93.27 per share,
subject to adjustment under certain conditions.  The notes may be
redeemed, in whole or in part, by the Company at any time on or after
September 15, 2002.  The redemption price will range from $309,420,000
to $302,370,000 if the notes are redeemed between September 15, 2002
through September 14, 2006.  Any redemption made on or after September
15, 2006 will be redeemed at $300,000,000.  Accrued interest to the
redemption date will be paid by the Company in each redemption.

**7.      Subsequent Event**

**Stock Split**

On August 24, 1999 and October 20, 1999, respectively, the Company's
Board of Directors and stockholders approved a two-for-one stock split
(to be effective in the form of a stock dividend) to be paid on November
12, 1999.   The accompanying consolidated financial statements do not
give effect to the pending stock split.

**Item 2.   Management's Discussion and Analysis of Financial Condition and  Results of Operations**

The statements contained in this Quarterly Report on Form 10-Q (the
"Report") that are not historical are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), including statements regarding the
Company's expectations, beliefs, intentions or strategies regarding the
future. Forward-looking statements include, without limitation,
statements regarding the extent and timing of future revenues and
expenses and customer demand, statements regarding the deployment of the
Company's products, and statements regarding reliance on third parties.
All forward-looking statements included in this document are based on
information available to the Company as of the date hereof, and the
Company assumes no obligation to update any such forward-looking
statement. It is important to note that the Company's actual results
could differ materially from those in such forward-looking statements.

**Overview**

Siebel Systems, Inc. ("Siebel" or the "Company") is the world's
leading supplier of Web-based front office software systems.  Siebel
provides an integrated family of sales, marketing and customer service
application software for field sales, customer service, telesales,
telemarketing, field service, third-party resellers and Internet-based
eBusiness. Siebel Systems' products are designed to meet the needs of
small, medium and large businesses.

In today's increasingly competitive global markets, businesses must
continuously improve their operations. Having spent considerable effort
and resources in previous years automating finance, manufacturing,
distribution, human resources management, and general office operations,
many businesses are now looking to apply the leverage of information
technology to their sales, marketing and customer service processes.
Unlike previous automation efforts which have focused on decreasing
expenses, sales, marketing and customer service information systems focus
primarily on increasing revenues and customer satisfaction.

The Siebel Front Office Applications are comprised of a broad range
of advanced Web-based application software products designed to allow
corporations to deploy comprehensive sales, marketing and customer
service information systems on a global basis. The Company's products
provide support for a number of frequently interdependent distribution
channels, including direct field sales, telesales, telemarketing, retail,
customer service, call centers, field service, resellers, business
partners and Internet-based e-commerce, marketing and customer service.
The Company's products provide support for a broad range of industries,
business practices and multiple languages and currencies.

**Results of Operations**

**Revenues**

Software.  License revenues increased to $125,951,000 for the three
months ended September 30, 1999 from $77,225,000 for the three months
ended September 30, 1998 and decreased as a percentage of total revenues
to 64% in the third quarter 1999 from 74% in the third quarter 1998.
License revenues increased to $329,388,000 for the nine months ended
September 30, 1999 from $200,567,000 for the nine months ended September
30, 1998 and decreased as a percentage of total revenues to 67% in the
fiscal 1999 period from 75% in the fiscal 1998 period.  License revenues
increased in absolute dollars during this period as compared to the
respective prior period due to an increase in the number of licenses of
Siebel applications sold to new and existing customers and also due to
licenses of new modules, released with the latest version of Siebel
applications, sold to existing users of Siebel base applications.  The
increase in the number of licenses was primarily due to continued demand
by new and existing customers for products in the Siebel applications
family both in the United States and internationally.  The Company
expects that license revenues will remain the same or decrease as a
percentage of total revenues as the Company's maintenance revenues
continue to grow as a result of increases in the installed base of
customers receiving maintenance and due to the Company's expansion of its
consulting organization to meet anticipated customer demands in
connection with product implementation.

Professional Services, Maintenance and Other.  Professional services,
maintenance and other revenues increased to $69,366,000 for the three
months ended September 30, 1999 from $26,969,000 for the three months
ended September 30, 1998 and increased as a percentage of total revenues
to 36% in the third quarter of 1999 from 26% in the third quarter of
1998. Professional services, maintenance and other revenues increased to
$164,395,000 for the nine months ended September 30, 1999 from
$67,815,000 for the nine months ended September 30, 1998 and increased as
a percentage of total revenues to 33% in the fiscal 1999 period from 25%
in the fiscal 1998 period.  The increase in the absolute dollar amount
was primarily due to growth in the Company's consulting business and
growth in the installed base of customers with a maintenance contract.
First-year maintenance is typically sold with the related software
license.  Revenue related to such maintenance is deferred based on
vendor-specific objective evidence of fair value and amortized over the
term of the maintenance contract, typically 12 months.  The Company
expects that professional services, maintenance and other revenues will
remain the same or increase as a percentage of total revenues due to
increased maintenance revenues derived from the Company's growing
installed base and due to the Company's expansion of its consulting
organization to meet anticipated customer demands in connection with
product implementation.

The Company markets its products in the United States through its
direct sales force and internationally through its sales force and
through distributors which are primarily in Japan, Europe, Latin America,
South Africa and Asia.  International revenues accounted for 31% and 29%
of license revenues for the nine months ended September 30, 1999 and
1998, respectively.  The Company is increasing its international sales
force and is seeking to establish distribution relationships with
appropriate strategic partners and expects international revenues will
continue to account for a substantial portion of total revenues in the
future.

**Cost of Revenues**

Software.  Cost of software license revenues includes third party
software royalties, product packaging, documentation and production. Cost
of license revenues increased to $1,510,000 for the three months ended
September 30, 1999 from $993,000 for the three months ended September 30,
1998. Cost of license revenues increased to $5,111,000 for the nine
months ended September 30, 1999 from $4,295,000 for the nine months ended
September 30, 1998.  Cost of license revenues as a percentage of total
revenues was less than 3% for each of the nine month periods and three
month periods ended September 30, 1999 and 1998.  All costs incurred in
the research and development of software products and enhancements to
existing products have been expensed as incurred, and, as a result, cost
of license revenues includes no amortization of capitalized software
development costs.  These costs are expected to remain the same or
increase as a percentage of total revenues.

Professional Services, Maintenance and Other.  Cost of professional
services, maintenance and other revenues consists primarily of personnel,
facilities and systems costs incurred in providing consulting and
customer support.  Cost of professional services, maintenance and other
revenues increased to $46,942,000 for the three months ended September
30, 1999 from $16,698,000 for the three months ended September 30, 1998
and increased as a percentage of total revenues to 24% in the fiscal 1999
period from 16% in the fiscal 1998 period.  Cost of professional
services, maintenance and other revenues increased to $105,620,000 for
the nine months ended September 30, 1999 from $42,730,000 for the nine
months ended September 30, 1998 and increased as a percentage of total
revenues to 21% in the fiscal 1999 period from 16% in the fiscal 1998
period.  The increase in the absolute dollar amount reflects the effect
of fixed costs resulting from the Company's expansion of its maintenance
and support organization and growth in the Company's consulting business.
 The Company expects that professional services, maintenance and other
costs will continue to increase in absolute dollar amount as the Company
expands both its customer support organization to support a growing
installed base and its consulting organization to meet anticipated
customer demands in connection with product implementation.  These costs
are expected to remain the same or increase as a percentage of total
revenues.

**Operating Expenses**

Product Development.  Product development expenses include expenses
associated with the development of new products, enhancements of existing
products and quality assurance activities, and consist primarily of
employee salaries, benefits, consulting costs and the cost of software
development tools. Product development expenses increased to $16,532,000
for the three months ended September 30, 1999 from $11,572,000 for the
three months ended September 30, 1998 and decreased as a percentage of
total revenues to 8% in the fiscal 1999 period from 11% in the fiscal
1998 period.  Product development expenses increased to $50,160,000 for
the nine months ended September 30, 1999 from $30,862,000 for the nine
months ended September 30, 1998 and decreased as a percentage of total
revenues to 10% in the fiscal 1999 period from 11% in the fiscal 1998
period.  The increase in the absolute dollar amount of product
development expenses was primarily attributable to costs of additional
personnel in the Company's product development operations. The Company
anticipates that it will continue to devote substantial resources to
product development. The Company expects product development expenses to
increase in absolute dollar amount but remain at a similar percentage of
total revenues as in the first nine months of 1999.  The Company
considers technological feasibility of its software products to have been
reached upon completion of a working model that has met certain
performance criteria.  The period between achievement of technological
feasibility and general release of a software product is typically very
short, and development costs incurred during that period have not been
material.  Accordingly, the Company has not capitalized any software
development costs to date.

Sales and Marketing.  Sales and marketing expenses consist primarily
of salaries, commissions and bonuses earned by sales and marketing
personnel, field office expenses, travel and entertainment and
promotional expenses. Sales and marketing expenses increased to
$71,037,000 for the three months ended September 30, 1999 from
$47,242,000 for the three months ended September 30, 1998 and decreased
as a percentage of total revenues to 36% in the fiscal 1999 period from
45% in the fiscal 1998 period.  Sales and marketing expenses increased to
$183,595,000 for the nine months ended September 30, 1999 from
$122,163,000 for the nine months ended September 30, 1998 and decreased
as a percentage of total revenues to 37% in the fiscal 1999 period from
46% in the fiscal 1998 period.  The increase in the dollar amount of
sales and marketing expenses reflects primarily the hiring of additional
sales and marketing personnel and costs associated with expanded
promotional activities.  The Company expects that sales and marketing
expenses will continue to increase in absolute dollars as the Company
continues to expand its sales and marketing efforts, establishes
additional sales offices in the United States and internationally and
increases its promotional activities. These expenses are expected to
remain at a similar percentage of total revenues as in the first nine
months of 1999.

General and Administrative.  General and administrative expenses
consist primarily of salaries and occupancy costs for administrative,
executive and finance personnel. General and administrative expenses
increased to $12,342,000 for the three months ended September 30, 1999
from $6,915,000 for the three months ended September 30, 1998 and
decreased as a percentage of total revenues to 6% in the fiscal 1999
period from 7% in the fiscal 1998 period. General and administrative
expenses increased to $31,949,000 for the nine months ended September 30,
1999 from $17,724,000 for the nine months ended September 30, 1998 and
decreased as a percentage of total revenues to 6% in the fiscal 1999
period from 7% in the fiscal 1998 period.  The increase in the absolute
dollar amount of general and administrative expenses was primarily due to
increased staffing and associated expenses necessary to manage and
support the Company's increased scale of operations.  The Company
believes that its general and administrative expenses will continue to
increase in absolute dollars as a result of the continued expansion of
the Company's administrative staff and facilities to support growing
operations.  The Company anticipates that its general and administrative
expenses as a percentage of total revenues should remain at a similar
percentage as in the first nine months of 1999.

Merger related expenses. In connection with the merger with Scopus,
the Company incurred direct merger-related expenses of approximately
$13,500,000 consisting of direct transaction fees for investment bankers,
attorneys, accountants and other professional fees of $9,100,000,
integration charges related to duplicate facilities and equipment of
$3,100,000 and other miscellaneous expenses of $1,300,000. The Company
also incurred indirect merger-related expenses of approximately
$1,800,000 for joint sales training and merger-related marketing costs,
which are included within sales and marketing expenses.

There were no significant merger-related expenses in the three and
nine months ended September 30, 1999.

**Operating Income and Operating Margin**

Operating income increased to $46,954,000 for the three months ended
September 30, 1999 from $20,774,000 for the three months ended September
30, 1998 and operating margin increased to 24% in the fiscal 1999 period
from 20% in the fiscal 1998 period.  For the nine months ended September
30, 1999 operating income increased to $117,348,000 from $37,108,000 for
the nine months ended September 30, 1998 and operating margin increased
to 24% in the fiscal 1999 period from 14% in the fiscal 1998 period.
These increases in operating income and margin were primarily due to
$13,500,000 of merger-related expenses incurred in the nine months ended
September 30, 1998, not recurring in 1999.  Excluding the merger-related
expenses, operating income for the nine months ended September 30, 1999
increased to $117,348,000 from $50,608,000 for the nine months ended
September 30, 1998 and operating margin increased to 24% in the fiscal
1999 period from 19% in the fiscal 1998 period. This increase in
operating income and margin was due to increases in license revenues
without a proportional increase in cost, particularly costs associated
with the hiring of new personnel.  The Company expects operating margins,
net of merger-related expenses, to decrease as compared to operating
margin for the first nine months of 1999 as it continues to invest
heavily in sales, marketing, development and support activities globally.

**Other Income, Net**

Other income, net is primarily comprised of interest income earned on
the Company's cash and cash equivalents and short-term investments and
reflects earnings on increasing cash and cash equivalents and short-term
investment balances.

**Provision for Income Taxes**

Income taxes are comprised primarily of federal and state taxes.  The
provision for income taxes was $19,655,000 and $8,259,000 or 39.5% and
37%, respectively, for the three months ended September 30, 1999 and
1998, respectively.  The provision for income taxes was $47,311,000 and
$18,583,000 or  38% and 45%, respectively, for the nine months ended
September 30, 1999 and 1998, respectively.  The effective tax rate in
1998 was affected by the non-deductibility of certain merger-related
expenses.  The Company expects its effective tax rate for the remainder
of 1999 to be approximately 38%.

**Net Income**

The Company had net income of $30,103,000 for the three months ended
September 30, 1999 compared to net income of $14,063,000 for the three
months ended September 30, 1998. Diluted net income per share was $0.27
in the third quarter of 1999 compared to diluted net income per share of
$0.14 in the comparable period in 1998.  Net income was 15% as a
percentage of total revenues for the three months ended September 30,
1999 compared to net income of 13% for the three months ended September
30, 1998.  The Company had net income of $77,195,000 for the nine months
ended September 30, 1999 compared to net income of $23,001,000 for the
nine months ended September 30, 1998. Diluted net income per share was
$0.71 in the third quarter of 1999 compared to net income per share of
$0.23 in the comparable period in 1998.  Net income increased as a
percentage of total revenues to 16% in the nine months ended September
30, 1999 from 9% in the nine months ended September 30, 1998.

**Liquidity and Capital Resources**

The Company's cash, cash equivalents and short-term investments
increased to $624,622,000 as of September 30, 1999 from $231,849,000 as
of December 31, 1998, representing approximately 64% and 52% of total
assets, respectively.  This increase was primarily attributable to net
income, increases in accounts payable, income taxes payable, accrued
expenses, deferred revenue and the issuance of subordinated debentures
and common stock under the Company's stock option plans, partially offset
by an increase in accounts receivable and purchases of property and
equipment.  The Company's days sales outstanding (DSO) in accounts
receivable was 98 as of September 30, 1999, compared with 90 as of
December 31, 1998.  The Company expects DSO to continue to fluctuate
significantly in future quarters.

As of November 4, 1999, the fair market value of the Company's
marketable equity securities was $71,986,000.

The Company recently entered into a lease agreement for a new headquarters
facility in San Mateo, California.  The Company expects to incur significant
capital expenditures in connection with tenant improvements, funiture and
fixtures for this facility.  These expenditures are expected to be incurred
through the end of 2000.  In addition, the Company expects to continue
to incur capital expenditures associated with tenant improvements,
furniture and fixtures for newly-leased field offices.

Capital expenditures of the nature described above are expected to
increase during the remainder of 1999 and 2000.

The Company believes that the anticipated cash flows from operations,
cash, cash equivalents and short-term investments will be adequate to
meet its cash needs for working capital and capital expenditures for at
least the next twelve months.

**Year 2000 Preparedness**

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 ("Y2K") in order to remain functional.  Failure to
complete the necessary modifications could cause a disruption or failure
of such program and system.

The Company's Y2K initiative has been managed by a team of internal
staff and third-party consultants specializing in Y2K issues.  The team's
activities are designed to identify potential Y2K problems and to ensure
that there is no adverse effect on our core business operations and that
transactions with clients, suppliers and financial institutions are fully
supported.  The Company's efforts have focused on three areas:  (i) the
Company's products, (ii) internal operating systems and (iii) interfaces
with third-party systems.

o         Products. The Company has put in place a certification program to
verify the Y2K compliance of its products.  Beginning with version
4.0 (Siebel 98), the Company's programs have been designed to be
Y2K compliant.  The Company has applied a number of test approaches
and criteria to each of its products beginning with Siebel 98 and
believes that all such products are Y2K compliant. While we believe
that our currently developed and actively marketed products are Y2K
compliant for significantly all functionality, our software
products could contain errors or defects relating to Y2K. The
Company has advised certain of its customers that internal testing
of Y2K compliance should be conducted to ensure that the operations
managed by Siebel products continue without disruption. If such
modifications and conversions are not made, or are not completed in
a timely manner, the Y2K issue could have a material adverse impact
on our operations.  The costs incurred to test the Company's
products for Y2K compliance were incurred as normal product
development expenses.  Any additional expenses are expected to be
minimal.

o         Internal Operating Systems.  The Company has implemented a plan to
test all internal operating systems, such as computer hardware and
software, telephone/PBX systems, fax machines, facilities systems
such as building access and other miscellaneous systems on a
worldwide basis.  The Company has approached its Y2K internal
readiness program in the following three phases:  (i) assessment,
(ii) planning and (iii) implementation.  These phases included such
individual steps as taking an inventory of the Company's operating
systems prioritized by risk, identifying failure dates, defining a
solution strategy, estimating repair costs, identifying specific
tasks necessary to ensure readiness, determining resource
requirements and allocations, and finally, testing and fixing the
operating systems as well as putting in place contingency plans for
operating systems that have a high impact on the Company's
business.  The plan has been executed and the Company does not
believe that the Y2K issue will pose significant operational
problems to our internal operating systems. Costs incurred to
complete this process have not been material.

o         Third-Party Systems.  The Company has developed a Y2K process for
dealing with its key suppliers, distributors, vendors, system
integrators and other partners.  The Company has been in contact
with its key third-party relationships regarding their Y2K
compliance. The Company has received responses from its critical
third-party relationships, who have stated that they expect to
address all of their significant Y2K issues in a timely manner. The
Company is working to identify and analyze the most reasonably
likely worst case scenarios for key third party relationships
affected by Y2K.  These scenarios could include possible
infrastructure collapse, the failure of water and power supplies,
major transportation disruptions and failures of communications or
financial systems - any of which could have a material adverse
effect on the Company's ability to deliver its products and
services to its customers.  While the Company has contingency plans
in place to address most issues under its control, an
infrastructure problem outside of its control could result in a
delay in product shipments, depending on the nature and severity of
the problems.   The Company has analyzed its key third-party
systems and believes all of them to be largely Y2K compliant.
Costs incurred to complete this process have not been material.

Contingency plans.   Our Y2K Program is designed to minimize the
possibility of serious Year 2000 interruptions. However, since their
possibility cannot be eliminated, we are developing contingency plans
addressing Year 2000 concerns in high impact areas. These plans will
continue to be reviewed and updated through out the end of the calendar
year. Other contingency plans will be prepared, tested, and updated as
deemed practicable and appropriate.

The Company currently believes that the most reasonably likely worst-
case scenario is that there will be some Year 2000 disruptions at
individual locations that could affect individual business processes,
facilities or third parties for a short time. The Company does not expect
such disruptions to be long-term, or for the disruptions to affect the
operations of the Company as a whole. Because of the uncertainty as to
the exact nature or location of potential Year 2000-related problems that
might arise, the business continuity/contingency planning has focused on
development of flexible plans to minimize the scope, impact and duration
of any Year 2000 problems that may occur. The Company expects to have
personnel and resources available to deal with any Year 2000 problems
that occur. Some of the currently planned contingency actions include
designating emergency response teams, increasing staffing at critical
times, in particular the Year 2000 weekend, and heightening proactive
monitoring at likely dates of impact.

Although the Company has spent a large amount of time and resource to
address potential Y2K problems, there is no assurance that the Company
will be successful in its efforts to identify and address all Y2K issues.
Even though the Company has acted in a timely manner to complete all of
its assessments and planned solutions, some problems may not have been
identified or corrected in time to prevent material adverse consequences
to the Company.  The discussion above includes forward-looking statements
regarding Y2K and is based on the Company's best estimates given
information that is currently available and is subject to change.  As the
Company continues to progress with its Y2K initiatives, it may discover
that actual results will differ materially from these estimates.  See
"Factors Affecting Operating Results -- Year 2000 Problems may cause an
Interruption in our Business."

**Factors Affecting Operating Results**

A Limited Operating History Upon Which to Evaluate our Business.  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. You
should evaluate our prospects in light of the risks, expenses and
uncertainties that companies in their early stage of development
frequently encounter.

Net Revenue and Operating Results may Fluctuate.  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:

o         Level of product and price competition;

o         Length of our sales cycle and customer purchasing patterns;

o         The size and timing of individual license transactions;

o         Delay or deferral of customer implementations of our
products;

o         Success in expanding our customer support organization,

direct sales force and indirect distribution channels;

o         Timing of new product introductions and product enhancements;

o         Appropriate mix of products and services sold;

o         Levels of international sales;

o         Activities of and acquisitions by competitors;

o         Timing of new hires and the allocation of our resources;

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

o         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 on
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.

Quarterly Operating Results may Fluctuate.  Our net revenue and
operating results may vary drastically from quarter to quarter. The main
factors, which may affect these fluctuations, are:

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

o         The size and complexity of our license transactions;

o         The potential delays in recognizing revenue from license
transactions;

o         The timing of new product releases;

o         Seasonal variations in operating results; and

o         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.

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

Reliance on Strategic Relationship with Systems Integrators.  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 principal stockholders.
 We have also entered into significant relationships with other third-
party systems integrators such as PricewaterhouseCoopers and Deloitte &
Touche 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 Compaq Computer Corporation, IBM Corporation, Microsoft Corporation
and Sun Microsystems, among others. Our 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
system integrators to develop, deploy 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 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.  The 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 which 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. We may not be able to effectively compete in the Internet-
related products and services market.

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.

A Competitive and Rapidly Changing Market.  The market for 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
Web-based computing environments. Our future financial performance will
partly depend on the continued growth of organizations successfully
adopting Web-based computing environments. If the Web-based applications
market fails to grow or grows more slowly than we currently anticipate,
our business, operating results and financial condition could be
materially and adversely affected.

Customers may not Successfully Implement our Products.  Many of our
customers purchase and implement our products in phases. Our 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. 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.

A Limited Number of Products for our License Revenues.  In 1998 and
the first nine months of 1999, a substantial majority of our revenues
were attributable to sales of Siebel Front Office Applications. We expect
that such product family 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 system
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 which 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.

Success Requires us to Continue to Expand our Direct Sales Force and
Technical Support Staff.  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. Any 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.

Expanding Distribution May Create Additional Risks.  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.  Any failure to minimize channel conflicts
could materially and adversely affect our business, operating results and
financial condition.

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 and the nine months
ended September 30, 1999, license revenues from our ten largest customers
accounted for 22% and 15% of total revenues, respectively.  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.

Success Requires 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 forgo purchases of our products, which could have a material adverse
effect on our business, financial condition and results of operations.

Success Requires us to 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!), Saratoga Systems (Avenue), Baan
(BaanFrontOffice), Brightware (Brightware Contact Center, Brightware
Answer Agent, Brightware Advice Agent), Clarify Inc. - pending purchase
by Nortel Networks (ClearSales, ClearSupport), Onyx (Customer Center),
Epiphany (e.4 System), Silknet (eBusiness System), IMA (EDGE), Rubric
(EMA), Applix (Enterprise), Dendrite International, Inc. (Force One),
Firstwave Technologies, Inc. (Netgain), MarketFirst (MarketFirst),
Broadvision, Inc. (One-To-One Application System), Oracle Corporation
(Oracle Field Sales Online, Oracle Service and Oracle Call, Front Office
Application), Open Market (Transact, Folio, ShopSite, Live Commerce),
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 - pending purchase by Peoplesoft (Vantive Enterprise)
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 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
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 Relationship with Third-Party Vendors,
Interruptions in the Supply of Our Products may result.  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. 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. The absence of or any significant delay in the replacement of
that functionality could materially adversely affect our sales.

Software Errors or Defects 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 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.  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.
If we fail to manage our growth effectively, our business, financial
condition and results of operations could be materially and adversely
affected.

The Loss of our 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 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.

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 adversely affect our business, operating results and financial
condition.

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 the Company has
spent a large amount of time and resource to address potential Y2K
problems, there is no assurance that the Company will be successful in
its efforts to identify and address all Y2K issues.  Failure to complete
the necessary modifications could cause a disruption or failure of such
program and system. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations-Year 2000 Preparedness."

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. The Company generally manages its 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, the Company has 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 Stockholders 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 the Company's
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.

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 which have
affected the market price for many companies in industries similar or
related to ours and which have been unrelated to the operating
performance of these companies. These market fluctuations have, at times,
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 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 instituted a classified
Board of Directors in our Certificate of Incorporation. 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.

Substantial  Leverage and Debt Service Obligations.  The Company has
substantial amounts of outstanding indebtedness, primarily in the form of
subordinated notes.  As a result of this indebtedness, the Company's
principal and interest payment obligations have increased substantially.
 There is the possibility that the Company may be unable to generate cash
sufficient to pay the principal of, interest on and other amounts due in
respect of the Company's indebtedness when due.  The Company also expects
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.

The Company's substantial leverage could have significant negative
consequences, including:

o         increasing vulnerability to general adverse economic and
industry conditions;

o         limiting the Company's ability to obtain additional financing;

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

o         limiting the Company's flexibility in planning for, or reacting
to, changes in the Company's business and the industry in which
the Company competes;

o         placing the Company at a possible competitive disadvantage vis-
a-vis less leveraged competitors and competitors that have
better access to capital resources.

Safe Harbor Provisions of the Private Securities Litigation Reform Act
of 1995.  Many of the statements made by or about the Company in this
Form 10-Q are forward-looking statements. These forward-looking
statements include, but are not limited to, statements about the
Company's industry, plans, objectives, expectations, intentions,
assumptions, and other statements that are not historical facts.  When
used in this Form 10-Q, the words "expect," "anticipate," "intend,"
"plan," "believe," "seek," "estimate," and similar expressions are
generally intended to identify forward-looking statements. Because these
forward-looking statements involve risks and uncertainties, including
those described in this "Factors Affecting Operating Results" section,
actual results may differ materially from those expressed or implied by
these forward-looking statements.  Market data and other market and
industry information presented in this Form 10-Q have been obtained from
independent industry sources.  Although the Company believes these
sources are reliable, the Company has not independently verified any of
such data or information.

**Item 3.   Quantitative and Qualitative Disclosures About Market Risk**

The tables below provide information about the Company's derivative
financial instruments and financial instruments that are subject to
market risk.  These include foreign currency forward contracts used to
hedge foreign currency receivables and intercompany balances, which are
subject to exchange rate risk, and available-for-sale short-term
investments, which are subject to interest rate risk.  The Company does
not consider its cash equivalents to be subject to interest rate risk due
to their short maturities.

The Company generally manages its 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.

The Company manages its interest rate risk by maintaining an
investment portfolio with debt instruments of high credit quality and
relatively short average maturities.  The Company also manages interest
rate risk by maintaining sufficient cash and cash equivalent balances
such that it is typically able to hold its investments to maturity.

The Company is exposed to equity price risks on its marketable equity
securities.  This investment is in a publicly-traded company in the high-
technology industry sector.  The Company typically does not attempt to
reduce or eliminate its market exposure on these securities.  A 10%
adverse change in the equity price would result in an approximate $4.7
million decrease in the fair value of the Company's marketable equity
securities as of September 30, 1999.

The following summarizes the Company's foreign currency forward
contracts, all of which mature in 1999, by currency, as of September 30,
1999.  Contract amounts are representative of the expected payments to be
made under these instruments (unaudited, in thousands):

`Fair
                                         Contract      Contract   Value at
                                          Amount        Amount    September 30,
                                          (Pay)        (Receive)    1999
                                     ----------------  ---------  ---------
German marks (contracts to pay
  DM/receive US$).................          DM  4,930  US$2,664    US$(20)

 British pounds (contracts to pay
 (Pounds)/receive US$)............    (Pounds)  4,741  US$7,628   US$(179)

Japanese yen (contracts to pay
 (Yen)/receive US$)...............    (Yen) 1,543,100  US$13,795  US$(714)

Euro (contracts to pay
  EUR/receive US$)................      EUR     2,300  US$2,475     US$26

Bristish pounds (contracts to pay
 (Pounds)/receive EUR)............    (Pounds)  830    EUR 1,279    US$ 5`

`Expected maturity date
                         -----------------------------------------------------
                                                                       There-
                           1999     2000     2001     2002     2003    after
                         -------- -------- -------- -------- -------- --------
US treasury securities..      --       --   $1,986   $3,002   $1,984   $3,900
Wtd. Avg. Yld...........                      5.88%    5.71%    5.73%    6.84%

Municipal securities....  $8,701  $55,234  $37,226  $36,708   $5,347       --
Wtd. Avg. Yld...........    3.86%    3.85%    3.78%    4.29%    4.39%

Corporate bonds.........      --       --       --   $4,505       --       --
Wtd. Avg. Yld...........                               5.93%`

On September 30, 1999, the Company had an investment portfolio of fixed
income securities, excluding those classified as cash and cash
equivalents, of $158,600,000.  These securities, like all fixed income
instruments, are subject to interest rate risk and will fall in value if
market interest rates increase.  If market interest rates were to
increase immediately and uniformly by 100 basis points from levels as of
September 30, 1999, the fair value of the portfolio would decline by
approximately $2,400,000.

**Part II  -  Other Information**

**Item 1. Legal Proceedings**

In June 1996, Debra Christoffers, a former sales person of the
Company, filed a complaint for wrongful termination against the Company
and Thomas Siebel, in the Superior Court of California, County of San
Mateo.  On May 15, 1998, a jury returned verdicts in favor of Mr. Siebel
and against the Company for an immaterial amount.  Both the plaintiff and
the Company have filed notices of appeal. The matter has since been
settled on terms that the Company considers favorable.

In October 1999, SAP America, Inc. filed a complaint against the
Company in the Court of Common Pleas of Delaware County, Pennsylvania.
The Complaint alleges tortuous interference with contractual relations,
predatory hiring, misappropriation of trade secrets, and unfair
competition in connection with the Company's employment of 27
individuals formerly employed by SAP America or its affiliated
companies.  The Company believes the claims are without merit,
and intends to defend itself vigorously.  The Company believes
that the ultimate outcome of the action will not have a material
effect on the Company's financial position or results of operations,
although there can be no assurance as to the outcome of such litigation.

The Company is engaged in other legal actions arising in the
ordinary course of business.  The Company believes it has adequate
legal defenses and believes that the ultimate outcome of these actions
will not have a material effect on the Company's financial position
or results of operations.

**Item 2. Changes in Securities and Use of Proceeds**

The effective date of the Company's first registration statement,
filed on Form S-1 under the Securities Act of 1933 (No. 333-12061)
relating to the Company's initial public offering of its Common Stock,
was June 27, 1996. There has been no change to the disclosure contained
in the Company's report on Form 10-Q for the quarter ended March 31, 1998
regarding the use of proceeds generated by the Company's initial public
offering of its Common Stock.

**Item 4.         Submission of Matters to a Vote of Security Holders**

A Special Meeting of Stockholders was held on October 20, 1999 to act
on the following matters:

1.      To approve an amendment to the Company's Certificate of
Incorporation to increase the authorized number of shares of Common
Stock from 300,000,000 shares to 800,000,000 shares. The votes cast
for and against this amendment were 76,786,323 and 4,939,828
respectively, with 89,127 shares abstaining.

2.      To approve an amendment to the Company's 1996 Equity Incentive Plan
to increase the aggregate number of shares of Common Stock
authorized for issuance under such plan by 15,000,000 shares, from
40,000,000 shares to 55,000,000 shares.  The votes cast for and
against this amendment were 40,740,919 and 24,744,860,
respectively, with 183,839 shares abstaining.

Based on these voting results, the amendment to the Company's
Certificate of Incorporation, as amended, to increase the authorized
number of shares of Common Stock from 300,000,000 shares to 800,000,000
shares and the amendment to the Company's 1996 Equity Incentive Plan to
increase the aggregate number of shares of Common Stock authorized for
issuance under such plan by 15,000,000 shares, from 40,000,000 shares to
55,000,000 shares, was approved.

**Item 6:  Exhibits and Reports on Form 8-K**

**(a) Exhibits**

`Exhibit Number           Description of Document
--------------           -----------------------


2.1    Agreement and Plan of Merger and Reorganization, dated March 1,1998,
       among the Registrant, Syracuse Acquisition Sub, Inc. and Scopus
       Technology, Inc.(4)

3.1    Amended and Restated Certificate of Incorporation of the Registrant, as
       amended.(6)

3.2    Bylaws of the Registrant.(1)

4.1    Reference is made to Exhibits 3.1 and 3.2.

4.2    Specimen Stock Certificate.(1)

4.3    Restated Investor Rights Agreement, dated December 1, 1995, between the
       Registrant and certain investors, as amended April 30, 1996 and June 14,
       1996.(1)

10.1   Registrant's 1996 Equity Incentive Plan, as amended.(3)

10.2   Registrant's Employee Stock Purchase Plan, as amended.(3)

10.3   Form of Indemnity Agreement entered into between the Registrant and
       its officers and directors.(1)

10.4   Registrant's Deferred Compensation Plan, dated January 10,1997.(5)

10.5   Master Alliance Agreement, dated March 17, 1995, between the Registrant
       and Andersen Consulting  LLP.(1)(2)

10.6   Assignment Agreement, dated September 20, 1995, by and between the
       Registrant and Thomas M. Siebel.(1)

10.7   Lease Agreement, dated June 4, 1996, by and between the Registrant and
       Crossroad Associates and Clocktower Associates.(1)

27.1   Financial Data Schedule.(7)

_____________________

(1) Incorporated by reference to the Registrant's Registration Statement on Form
    S-1 (No. 333-03751), as amended.

(2) Confidential treatment has been granted with respect to portions of this
    exhibit.

(3) Incorporated by reference to the Registrant's Registration Statement on Form
    S-8 (No. 333-07983), as amended.

(4) Incorporated by reference to exhibit 99.1 of the Registrant's Current Report
    on Form 8-K filed by the Registrant on March 16, 1998.

(5) Incorporated by reference to the Registrant's Annual Report on Form 10-K for
    the year ended December 31, 1996.

(6) Incorporated by reference to the Registrant's Annual Report on Form 10-K for
    the year ended December 31, 1997.

(7) Filed herewith.`

**(b) Reports on Form 8-K**

None

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**SIEBEL SYSTEMS, INC.**

**SIGNATURES**

Pursuant to the requirement of the Security Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



| |                     
| | --------------------
| | SIEBEL SYSTEMS, INC.

| |             
| | ------------
| | (Registrant)

Dated: November 15, 1999



| |     |                     
| | --- | --------------------
| | By: | /s/ Howard H. Graham

| |                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                     
| | Howard H. Graham                                                                                                                                    
| | Senior Vice President Finance and
                                    Administration and
                                    Chief Financial Officer
| | (Principal Financial Officer)                                                                                                                       



| |     |                    
| | --- | -------------------
| | By: | /s/ Paul J. Gifford

| |                               
| | ------------------------------
| |                               
| | Paul J. Gifford               
| | Vice President, Controller    
| | (Principal Accounting Officer)

---