NETTING IT OUT

1Q2014 was a quiet quarter for customer service.

Customer growth was down. Only Clarabridge improved significantly in both customer acquisition and repeat business.

Product activity was light. Five of the suppliers we track did not make any product announcements. IntelliResponse and Nuance introduced new products. KANA and Oracle introduced new versions.

Company activity was light. Four suppliers did not make any company announcements. Most significantly, KANA was acquired by Verint.

Clarabridge earned a Customer Service Star for 1Q2014.

One customer service trend emerged—customer service integration. Customer Service Integration is one of our key criteria in our frameworks for evaluating every type of customer service product. Integration makes it easier for customers to get answers to their questions and solutions to their problems. Through new integration announced this quarter, eGain, IntelliResponse, and Oracle have given their customers the potential for lower cost to serve and for an improved customer service experience.

This report is our last Quarterly Customer Service Update. We’ll migrate to Annual Customer Service Update Reports beginning for 2014.

With this report, we begin our eleventh year of quarterly updates on the suppliers and products in 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 overall customer growth
• Product activity
• Company activity including mergers and acquisitions, partnerships and alliances, and hiring

In our evaluations of quarterly performance, we want to see continuing customer growth, ongoing improvements in products, and steady company viability. 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.

Customer Service Suppliers and Products

Here, in Table A, are the customer service suppliers and products that we currently cover:

© 2014 Patricia Seybold Group, Inc.

Verint Acquires KANA

On January 6, 2014, Verint, a publicly held, Melville, NY-based supplier of customer experience management software and security software, announced that it signed a definitive agreement with Accel-KKR to acquire KANA for approximately $514 million in cash, about five times KANA’s current revenues. The acquisition was completed on February 3, 2014. Technology private equity investor, Accel-KKR, had taken the then publicly held KANA private in December 2009 for a cash price of approximately $49 million.

While we included this news in our 4Q2013 report, we’ll also repeat it here. Look for additional detail and analysis of the acquisition in the KANA, a Verint Company, section of this report.

Calendar and Fiscal Quarters

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.

A Quiet 1Q2014

Customer service had a quiet quarter in 1Q2014 due to low levels of product activity and company activity and to not-so-good customer growth. Here’s what we mean...(more)

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