Uuuuu...
U have many points of potential problems with perfomance :

web_server(1) --(2)-->app_server(3) --(4)-->oracle_server(5)
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1) perfomance of Web server with 520 connections
2) traffiic between web and application server
3) perfomance of App server with 520 connections (probably one of Java app server)
4) traffiic between app and oracle server
5) perfomance of oracle server with 520 connections
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Try to implement following seq of actions:
-- check terminal access (sqlplus) from db server box (u exclude sqlnet)
then
-- check terminal access (sqlplus) from application server box (u include traffic
between Siebel application BOX ONLY and oracle server)
and so on...
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I don't thing that u have problems with sqlnet only.