Customer Service Company and Product Update, 4Q2009
A Very Good 4Q2009 for Knowledge Management-Based Customer Service
By Mitchell I. Kramer, Sr. VP and Sr. Consultant, March 11, 2010

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NETTING IT OUT

4Q2009 was a very good quarter for KM-based customer service.

Customer growth improved and/or good financial performance resulted for nine of our ten suppliers.

Product activity was very high in 4Q2009. There were new products or major new versions from Attensity Group, Consona CRM, eGain, InQuira, IntelliResponse, RightNow, and Salesforce.com.

We see four key product trends in KM-based customer service: Integration of social media as both a customer interaction channel and a knowledge source and support for assisted-service continue to be hot; mobile computing and cloud computing are coming on.

From a company perspective, there was one major M&A item in the quarter. KANA went private.

Two of our ten suppliers earned Customer Service Stars for 4Q2009: Attensity Group and IntelliResponse. Both demonstrated strong customer growth and strong financial performance. Both introduced innovative new products and new product versions.

KM-based customer service is positioned for a very good start in 2010.

Knowledge Management (KM)-Based Customer Service

4Q2009 was a good quarter for KM-based customer service. After a run of seven excellent quarters, growth in KM-based customer service slowed in 1Q2009. Business rebounded in 2Q2009 and increased in 3Q2009 with improved customer growth and resulting good financial performance. 4Q2009 was the best quarter of the year!

Customer Growth for Eight of Ten Customer Services Suppliers

Customer growth and/or financial performance were up in 4Q2009 for eight of the ten suppliers that we cover: Astute Solutions, Attensity Group, eGain, IntelliResponse, KANA, and nGenera CIM all combined improved customer growth and improved financial performance. InQuira, RightNow, and Salesforce.com were flat or slightly down in customer growth but had improved financial performance.

High Levels of Product Activity

Significant KM-based customer service products were announced in 4Q2009. Seven of our ten suppliers introduced important products. Here are the highlights:

•Attensity Group announced a new version of Attensity Cloud, Attensity Analyze for Voice of the Customer 5.2, and Empolis:Service Lifecycle Suite 6.1. In addition, Attensity Group and Vovici jointly announced a partnership to deliver a SaaS-based loyalty solution.

•Consona CRM made three product announcements during 4Q2009. On October 5, Consona announced that it plans to unveil a cloud-based deployment option early in 2010. On October 19, the firm announced GA of Consona Knowledge Driven Support (KDS) 10 and Consona Knowledge Management 7.3.

•eGain’s big product news of 4Q2009 was the announcement of eGain Service 9, a major new version of its customer service suite.

•IntelliResponse announced an application for Facebook that lets organizations deploy IntelliResponse on their Facebook Fanpages. Visitors can enter questions in a search box on a Fanpage and receive the “one right answer” as well as related and suggested questions, top 10 questions, answer ratings, and session summaries.

•InQuira announced iConnect for Oracle’s Siebel Contact Center, its first iConnect offering. iConnect integrates InQuira’s KM-based customer service capabilities with contact center applications. InQuira also introduced InQuira 8.2. This point release includes a feature called iAssist that provides facilities for agents to help customers complete activities such as completing forms and applications.

•RightNow introduced the regular quarterly release of its software suite, RightNow CX November ’09. It includes the technology from RightNow’s acquisition of HiveLive.

•Salesforce.com introduced the regular quarterly release of its software offerings: Sales Cloud, Service Cloud, and Force.com. Spring ’10 has many interested features, including new social media capabilities, and mobile computing capabilities. On November 18, Salesforce.com announced Salesforce Chatter. Salesforce Chatter is an application that enables real-time communication and collaboration among the employees, the Salesforce.com applications, and the Salesforce.com data within an enterprise.

Four Key Product Trends

Looking at these new products and considering what we’re hearing from their potential users, we see four key product trends in KM-based customer service:

•Social media

•Support for assisted-service

•Mobile computing

•Cloud computing

We’ve been reporting on the social media and support for assisted-service trends for a few quarters. Social networking as both a customer interaction channel and as a source of knowledge continues into 4Q2009. Social media can be a boon to customer service, helping organizations and their customers understand how customers are using products and services, about how they’re solving or working around problems with those products and services. It can help customers help other customers install and use products and services. This quarter, Attensity Group, eGain, IntelliResponse, KANA, RightNow, and Salesforce.com all included social media capabilities in their new products.

Support for assisted-service is another hot area in KM-based customer service. Agents need to find answers and solutions on behalf of the customers who call contact centers. KM-based suppliers have recognized requirements for adding knowledge management capabilities to contact center software, for improving agents’ capabilities to find answers and solutions, and for helping small and mid-sized businesses deliver assisted-service. In 4Q2009, InQuira, RightNow, and Salesforce.com include assisted-service features in their new offerings. InQuira has built a product strategy around assisted-service.

Blackberry devices, iPhones, and, now, Android-based devices have made the computing component of mobile computing a reality. We don’t carry smart phones. We carry small but powerful computers, and we expect them to function and perform as computers. (Of course, we’ve learned to take connectivity and bandwidth for granted, but that’s a story for another day.) Supporting them as computers makes sense. This quarter, eGain, IntelliResponse, and Salesforce.com all made announcements around mobile computing.

IntelliResponse, RightNow, and Salesforce.com, as well as the Attensity division of Attensity Group, have always been cloud computing suppliers. Astute Solutions and nGenera both offer on-premise, hosted single tenant, hosted multi-tenant deployments for its offerings. eGain offers on-premise and hosted single-tenant deployments. With 4Q2009 or early 1Q2010 announcements, both Consona CRM and InQuira are joining the cloud crowd.

Cloud computing is a winner for customers and suppliers. For customers, fast deployments, lower deployment costs, and getting rid of availability, reliability, scalability, and performance responsibilities are compelling and well proven benefits. For suppliers, predictable revenue is so much more appealing than revenue peaks and valleys as deals that slip into and out of quarters.

Low Level of Company Activity

There wasn’t much significant company action during 4Q2009, at least nothing about which we haven’t reported. To be accurate, KANA made big 4Q2009 company news, but it’s company news that we reported in our 3Q2009 reports. Briefly, on October 27, KANA announced an agreement to sell its assets and liabilities to Accel-KKR for a cash purchase price of approximately $48.9 million. Once the transaction is completed, KANA’s software and services business will operate as a privately held company under the KANA brand. The change doesn’t affect our coverage, but it will affect the level of public information that we’ll be able to obtain about KANA.

Two Customers.com Customer Service Stars for 4Q2009

Balancing customer growth, financial performance, and products, Attensity Group and IntelliResponse earned Customer Service Stars for 4Q2009. Both firms demonstrated strong customer growth and strong financial performance. Both introduced innovative new products and/or new product versions with significant improvements. Props to Attensity Group and IntelliResponse.

Companies and Products

Here are the KM-based customer service suppliers and products that we cover:

•Astute Solutions RealDialog

•Attensity Group E-Service

•Consona Corporation Consona CRM

Knowledge Management

•eGain Service

•InQuira 8

•IntelliResponse

•KANA Service Solutions

•nGenera Customer Interaction Management

Suite

•RightNow CX

•Salesforce.com Service Cloud

This Report

With this report, we complete our fifth year of quarterly updates on the suppliers and products in KM-based customer service. These updates focus on factors that are important in the evaluation, comparison, and selection of customer service products. More specifically, we examine these factors in our quarterly updates:

•Customer acquisition and customers growth

•Product activity

•Company activity including hiring

•Company financial performance

In our evaluations of quarterly performance, we want to see continuing customer growth, ongoing improvements in products, steady company viability, and good financial performance. We don’t want to change our evaluations based on a quarter’s news, but we do want to raise a red flag when that news deviates from a positive, multi-quarter trend, or to wave a green flag when that news is particularly good. When significant product and company events occur, we identify and highlight those that could have an impact on customer service products and technologies, suppliers, and the market landscape.

Note that these quarterly reports accommodate the fiscal years of suppliers that don’t run on the calendar year—IntelliResponse and Salesforce.com both have fiscal quarters that end a month later than calendar quarters. We wait for them every quarter.

Now, let’s take a look at 4Q2009 performance for each of our 10 suppliers.

This report continues...

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