Two years after a near-fatal elephant attack in 2009, Tom Siebel returned to work full-time. By then, the company was on course to bankruptcy and had to be restructured Image: Ethan Pines for Forbes
Wincing with pain, Tom Siebel steps from behind his desk at C3 IoT headquarters in Redwood City, California, to sketch out the future of the Internet of Things on the back of a piece of office paper. It’s been eight years and 19 surgeries since a near-fatal elephant attack in the Serengeti in 2009, but Siebel swears he’s fully recovered and must have tweaked something while kiteboarding over the weekend. On the desk sit two Lucite cases, one containing the shards of his smashed iPhone from that day and the other the bullet that took down his assailant. A black-and-white photograph of a charging elephant looms on the wall. “It’s not the same one,” he says. “You get the idea.”
Every day, Siebel gets up around 5 am, hits the gym and gets to work. At 64, and worth some $2.5 billion from the sale of his customer-management software company to Oracle in 2006, he still regularly works into the night. His newest project is C3 IoT, the awkward name referring to the Internet of Things—the billions of industrial sensors and other physical devices now connected to the internet. In March, investors (led by billionaire Jim Breyer) put more than $10 million into C3, valuing it at $1.4 billion. Siebel thinks it will eventually be twice as big as his last score.
Debuting at No 19 on the Forbes Cloud 100 list, C3 IoT operates in a fast-growing sector of the cloud that provides software to the Internet of Things. Research firm Gartner predicts 2 billion new devices worldwide will be connected to the internet this year—everything from streetlights to oil pumps—bringing the grand total to some 8.4 billion. These devices can easily phone home when they are broken or performing poorly. But more valuable to their corporate owners, software provided by companies like C3 can read all those logs and do things like predict that a device is likely to break down in the near future, or warn that malicious hackers are probing the security on a power plant’s reactors. “Customers are just figuring it out right now,” says Alfonso Velosa, an analyst at Gartner. “It’s a great place to be growing.”
Founded eight months before the elephant nearly took off Siebel’s foot, C3 was supposed to be an energy company. Flush from the sale of Siebel Systems, Siebel had been content to work on non-profits and spend time with family until some symposia he hosted on the energy sector got him interested in building software to manage the flow of electricity from plant to home more efficiently. Patricia House, a long-time collaborator, signed on as CEO, and the company, then called C3 Energy, started working with Cisco, Dow Chemical and General Electric. To fund the company, Siebel emailed wealthy friends on a Friday, and he had $20 million in commitments, including $6 million of his own, by Sunday afternoon.
Siebel’s contributions to C3 took a nosedive after his August 2009 run-in on safari left him fighting for his ability to walk. His weight down to 121 pounds, Siebel spent much of the next two years rolling into board meetings in an electric wheelchair. When he came back full-time, oil prices had stumbled, crushing spending for software at energy companies, and C3 was on course to go bankrupt.
No one was buying C3’s energy software anymore, but Siebel saw a bright spot in the data flowing through the wind turbines and utility poles that made up the grid. By September 2011, he’d decided to restructure C3. After the holidays he laid off 110 of its 150 employees—everyone except engineers—including some lifelong friends. Siebel says it was the hardest moment of his career. When he’d raised that money so quickly, “the understanding was the company would be successful or I would die trying,” he says. “I couldn’t just sit back and watch this thing diminish.”
After hunkering down for two years to rebuild the company’s core software, C3 returned to the market with a service that helps industrial customers ingest the data coming from their devices by putting it into custom applications. It’s a market crowded with giants like GE and Microsoft. While it’s impossible to verify from the outside, C3 claims it can build and deploy an app in as little as six weeks, ten times faster than and at a tenth of the cost of its competitors. One customer is Engie, a large French electric utility that has built 28 custom apps with C3’s software. One of them analysed more than a billion data points to figure out why one Middle Eastern power source was trailing another in performance by 2 percent.
Using machine-learning techniques to study the data, C3’s software discovered that specific maintenance events were causing gas turbines to degrade four times as fast. Fixing the problem saved the company more than $125 million a year.
Already cash-flow positive, C3 is on pace to about double its revenue this year to $100 million while tripling its bookings. Big new customers include Con Edison and Origin Energy.
And Siebel’s business isn’t limited to the Internet of Things. C3 recently signed a deal with a large US health care company to aggregate and analyse its health records.
The resulting data could help pharmacologists and radiologists predict who is likely to contract specific medical conditions or diseases.
In the race for customers, IoT companies typically choose a couple of key sectors (C3 naturally started with energy) to focus on and differentiate themselves, says Michele Pelino, an analyst at Forrester. Health care and aerospace are among C3’s next targets.
Analysts expect massive consolidation in the industry over the next decade, and Amazon (currently a partner) could prove to be more a rival than a friend. With staffing back up to 130 employees, C3 is competing more than anything for technical talent. “The competition is unlike anything I’ve ever seen,” says investor Breyer, whose legendary venture capital career has spanned three decades.
So far, Siebel is living up to the promise he made to his powerful friends. Says Breyer: “Tom has a chance to be a worldwide leader.” Again.