Event Summary
Broadbase Software Incorporated, a CRM vendor focused on the dot-com and Fortune 1000 markets, recently purchased Servicesoft Incorporated for $645M in stock. Broadbase's current suite of applications offers primarily analytics components including a personalization/recommendation engine, campaign management, and sales order tracking. Missing from Broadbase's offering are operational components geared towards service and support. The acquisition of Servicesoft will add web-based service and support functionality to broaden Broadbase's offering and remain competitive with E.piphany, their biggest direct competitor.
Both Broadbase and E.piphany have gone through an intense period of acquisitions and alliances since late last year to become the single vendor source for both analytic and operational CRM applications. Broadbase's recent activity includes:
Market Impact
A look at the press release history for the past 12 months of top CRM vendors E.piphany, Siebel, Onyx, and Broadbase indicates significant consolidation in the CRM market, and TEC believes this is just the beginning. Many organizations prefer to purchase full CRM suites from a single vendor with the functionality of best of breed applications. The easiest way for large CRM vendors to do this is to form alliances or purchase the firms that provide the functionality demanded by the market, thereby incorporating best of breed technology into their own offerings. Such agreements are often necessary because the large CRM vendors are too resource constrained to develop these applications in-house within the timeframe that the market demands.
User Recommendations
Organizations using Broadbase or Servicesoft software should question the vendor's long-term plans for the product line. TEC believes that there is more synergy than overlap with these organizations' offerings, but both vendors have personalization engines and campaign management applications. Before implementing these products ask the vendor which applications are going to be supported over the next 12 months. Furthermore if the product line is going to be simplified, find answers to the following questions:
Determining the long-term strategy of any CRM vendor is also beneficial before making a purchase decision. Ask the vendor what their plans are for acquisition and product development. Overly aggressive plans may indicate that the vendor is not allocating enough resources to provide service and support for their existing customer base. Conversely, overly conservative product development plans will cause the vendor's product line to become obsolete, requiring your organization to find a new vendor in the future rather than install upgrades from the current vendor.