One of the on-demand pioneers, RightNow’s core competency is service-centric CRM, due to its belief that customer service is a key company differentiator and that as the service department has the most contact, it has detailed customer insight. As it has evolved, the company has added sales and marketing functionality, but they are not as developed as the service function, something the acquisition will help address.
Salesnet’s sales workflow automation engine was one of three drivers behind the deal. RightNow wants to combine it with its own knowledge base to accelerate its customer experience management development plans. It was aiming to deliver workflow capability in 2008 but the Salesnet functionality will bring that forward by a year. It will be a key addition for RightNow, increasing its appeal to large organizations with complex B2B sales processes.
In large organizations people want to standardize [sales processes] across the organization. Workflow allows all sales peoples’ performance to be consistent with the top people, said RightNow CEO Greg Gianforte.
As part of the deal, RightNow also gets an additional 200 customers, plus 26 US-based staff and 12 offshore developers who bring expertise in the workflow area.
RightNow will support Salesnet’s existing customers and provide an upgrade path to a broader customer experience management system.
Although an early player, Boston Massachusetts-based Salesnet has always been one of the smaller and quieter players in the on-demand CRM area. Last year it had revenue of around $5m, while RightNow reported sales of $87m.
The plan is to deliver user interface-level integration between the products this summer, followed by full integration next year. The RightNow and Salesnet products do not share a technology base at the moment because where the RightNow back end is based on open-source software, Salesnet uses .NET architecture. RightNow is planning a new release of its full service, sales, and marketing suite in the fourth quarter known as the Castle release, which will use .NET for the front end but retain open-source technology at the rear.
A robust defender of open source on cost and scalability grounds, Gianforte said that the decision to opt for .NET was to enable access to smart client technology, something it had to do because Microsoft effectively owns the interface.
There has been a little consolidation among on-demand players so far and Gianforte does not think that there will be a deluge any time soon. We are still at the very beginning of the growth of the marketplace, he said. If you add up the revenue of all the on-demand vendors, it is not even 10% [of the whole CRM market]. Typically consolidation happens in mature markets and on-demand is far from mature.
