Behind the scenes with Tom Siebel, C3 and its data engine for the power grid

About a year after the newly-minted billionaire entrepreneur Tom Siebel saw his software company Siebel sell to Oracle for $5.85 billion in 2006, he found himself studying an entirely new field: the vast, complicated and slowly evolving energy industry.

At first Siebel’s interest was largely philanthropic, the 61-year-old inexhaustible Siebel told me during an interview earlier this month in a compact meeting room just off of the floor of the Tesla electric car factory in Fremont, California, during an energy innovation conference.

Tom Siebel, Executive Producer during HBO Documentary Films Screening of "Montana Meth" - March 13, 2007 (Photo by Michael Loccisano/FilmMagic)

Tom Siebel, Executive Producer during HBO Documentary Films Screening of “Montana Meth” – March 13, 2007 (Photo by Michael Loccisano/FilmMagic)

After the acquisition, Siebel spent some time putting together a couple of one-off energy research conferences, and worked on an award program for zero net energy homes that seems to have fallen by the wayside. Philanthropy, whether energy-related or not, was his chief aim. He spent tens of millions of dollars during this time bankrolling an anti-crystal meth campaign in Montana (where he owned a 62,000 acre ranch) that pelted the Montana airwaves, billboards and the internet with images of meth addicts with the rotted-out-teeth that comes with “meth mouth.” He also gave countless millions to other causes in education and research.

But after this period of exploration, out of all of Siebel’s passions, energy has slowly (it’s taken a few years) emerged as the one he’s now come to fully focus on with the same sort of aggressive spirit that he dished out during his decade leading Siebel. And his plans for energy are now far from philanthropic. Whether they’ll turn out as well as Siebel Systems did, well, that still remains to be seen.

During our interview Siebel described his now five-year-old energy software company C3, which was funded with $150 million of his and other people’s money, as “building an operating system for the smart grid,” and looking to grab a significant share of the trillions of dollars that are being spent on power grid technology upgrades.

The data tech behind C3

After five years in stealth mode and a few fits and starts, C3 is ready to provide the most comprehensive and exhaustive explanation of what it is actually doing. I started writing about C3 in late 2009, when it emerged in stealth mode, and at that time it had a decidedly different focus on carbon software.

C3 has now built a platform that it says can collect loads of granular data from disparate systems across the power grid — everything from transformers, to smart meters, to synchrophasors, to generation facilities — store all that data in the cloud (the company built it on Amazon(s amzn) Web Services), and then can analyze the data in various ways to help utilities save money and implement their grid technology more efficiently.

C3 uses this platform to sell utilities a set of applications, and the company has ten of them right now. Those applications include ways to identify energy theft, predict energy load, balance grid voltage, reduce residential energy consumption, reduce energy consumption of businesses, run smart meters more efficiently, and identify risks and hazards on the network. All this is done with a data engine and no hardware of its own. Not all of the applications are fully built out, Siebel acknowledged, but they’re all in the works.

GE's Grid IQ data visualization tool used C3 as its data platform

GE’s Grid IQ data visualization tool used C3 as its data platform

Siebel described the technology as “a nuclear reactor level analytics engine,” and “the same kind of technology that a Facebook(s fb) or a Twitter(s twtr) uses to manage millions of transactions a second.” Picture the type of platform that can capture data from tens of thousands of sensors like 60 times per second, he says.

In the modern world of software creation, C3 has an unusual strategy. The current mindset in the Valley is to start small with a minimum viable product (MVP) and scale out from there; not to create a behemoth product and then figure out how to use it. But, then again, not all companies are run, and partly bankrolled by, Siebel.

Siebel is well aware that he’s operating outside of the current norm: “No one else is doing this,” he said definitively. When I push him on that, he says this is the way to build an enterprise scale complex system, “we’re not South of Market making a tweeting app.”

It’s pretty much the opposite strategy of a company like Opower. Opower built a company around one product — helping utilities reduce residential energy consumption through detailed energy bills — and it is now trying to figure out how to turn those utility relationships and data into broader products. C3 and Opower compete when it comes to residential energy efficiency projects, but that’s just one of the pieces that C3 is going after.

C is for Siebel

Siebel is clearly taking a page from his days of running Siebel when it comes to C3’s alternative strategy.

“The game that we’re playing is to see if we can establish and maintain a market leadership position in this, like we did at these other companies [Siebel and Oracle]” Siebel said. “The market leader will get 50 percent share. Number two gets 15 percent share. Number three gets 10 percent share,” he added. So essentially, the plan is to build it out, grow rapidly, hope the timing is right, and wait for the customers to come.


It worked at Siebel Systems. While its competitors were building sales automation software for individual sectors like the pharmaceutical industry, Siebel Systems developed a family of products — at one point 400 in total across 25 languages — and grew the business to $2 billion in annual revenue by 2000 after starting in 1993. Siebel maintains that it was the “fastest growing software company in history.”

But then again, the tech world of 2014 isn’t the same one as it was in the late 1990s. And there are also major differences between selling to the customers that were buying CRM software from Siebel and utilities that are thinking about buying C3’s apps. Utilities are slow moving, conservative, and not always so tech savvy. Grid upgrades have also taken longer than some analysts had thought in the U.S., and consumer-facing upgrades like smart meters have faced push back in certain cities.

But Siebel has the patience of a man who’s done this multiple times before. He acknowledged that relationships with utilities can take a long time, but said C3 has recently made significant headway, announcing some important deals with major utilities. Siebel has also been able to convince a good deal of top level software execs (many who were with him at Siebel) to join him, and has brought on celebrity directors like former Secretary of State Condoleezza Rice and former Senator and Secretary of Energy Spencer Abraham, who can help with intros and deals.

Recently C3 announced that Exelon subsidiary Baltimore Gas & Electric would deploy two of C3’s app analytics (theft detection and smart meter operations) products across its 2 million smart meters. Siebel rattled off a list of utility partner names that have also come on board including SDG&E, SoCal Edison, PG&E, Commonwealth Edison, Entergy, Western Massachusetts Electric Company, Hydro Electric in Quebec, Public Service of Oklahoma, GDF Suez in Paris, and Enel in Italy.

Condoleezza Rice, a director at C3

Condoleezza Rice, a director at C3

C3 execs say the company has now broken through in the utility world, and it is signing up deals pretty quickly. It dropped a press release earlier this month that noted that bookings — “defined as guaranteed total contract value” in the press release– grew by 385 percent over the prior year, and its cash balance grew by 50 percent over the prior year. The strategy behind growing revenues is once C3 signs up a utility with one app, it will try to get the utility to buy the others (or even the whole portfolio).

C3 might be hitting some kind of inflection point now, but it’s been slow going. Back when C3 first emerged it was focused on building carbon emissions management software for corporations like Dow Chemical and Coca Cola to monitor and reduce their carbon footprint. That market evaporated shortly afterwards when it became apparent that carbon regulations would not be passed in the U.S. any time soon. The downturn of 2008 and the politicization of cleantech (Solyndra) also didn’t help much for launching a new company. There was significant turnover at C3 following this change over, and Siebel — who founded the company — only came on more recently as CEO.

Siebel is also a controversial figure to say the least. For every hardcore believer and fan of the man who helped define the “cult of personality” CEO, there’s another naysayer who doesn’t trust his numbers and claims. And he doesn’t avoid controversy: he famously campaigned for Sarah Palin during John McCain’s run for the Presidency back in 2008.

C3’s competitors are quick to discount C3’s long road, large funding, early pivot, and longtime lack of details regarding what it’s been doing. Just this month — five years into existence — I learned about its suite of 10 apps. Siebel himself has said that there’s a lot of people out there that don’t believe the company can build what it says it has built. Only customer rollouts and time will prove the naysayers right or wrong.

But I wouldn’t discount Siebel, the entrepreneur, just yet. The man is a survivor and a fighter.

He was once gored by an elephant on a trip to Tanzania and not only lived to tell the story, but made a pretty much full recovery. Then there’s also the fact that this could be his last startup hurrah — he’s got something to prove.

And at the end of the day, he doesn’t have all that much to lose if things don’t go according to plan. Siebel joked during our interview that if it doesn’t work out, well, then he’ll be back playing golf.