With this 4Q2012 Customer Service Update Report, we complete our ninth year of quarterly updates on the suppliers and products in customer service. Yes, we’ve been writing these reports since 2004, focusing on factors that are important in the evaluation, comparison, and selection of customer service products: customers, products, and company activity, staffing, and financial performance.
This quarter the suppliers and products are:
- Aptean Knova
- Attensity Analyze and Attensity Respond
- eGain Service
- IntelliResponse Virtual Agent (VA)
- KANA Enterprise, KANA Experience Analytics
- Moxie Spaces
- Next IT ActiveAgent
- Nuance/VirtuOz Intelligent Virtual Agent
- Oracle RightNow CX Cloud Service
- Salesforce.com Service Cloud, Knowledge, Marketing Cloud (Radian6)
Briefly, customer service came back strong in 4Q2012 to post a very good quarter driven by customer growth. We’re relieved and encouraged. Fourth quarters are typically good quarters for software suppliers, as their customers complete strategic projects and spend down expiring budgets. But, at the end of 2011, we were concerned. There had been a string of six consecutive mixed quarters, and it raised concerns about the state and the future of customer service software. One quarter certainly does not make a trend, but we’re encouraged. The suppliers we track have introduced or will soon introduce strong new products and major new product versions that will help their customers deliver better customer service.
Let’s go back five years to our 4Q2007 Customer Service Update Report. We stated in that report that customer Service suppliers closed out 2007 with a very good fourth quarter. Customer growth was the driver and $1 million+ deals made the quarter. Only two suppliers made significant product announcements. Company activity was low. In 4Q2007, the suppliers and products that we covered were:
- ATG Self-Service, Commerce
- eGain Service
- InQuira 8
- InStranet Contact Centers In-Line
- KANA Service Solutions
- KNOVA Application Suite
- RightNow CRM
A couple of points to compare customer service at the end of 2007 with customer service at the end of 2012:
1. Shift from big one-time fees to ongoing subscription licenses
2. Lower maintenance effort for customers
We mentioned: “$1 million+ deals made the quarter.” In 2007, only one of our suppliers, RightNow, offered subscription licenses for, what we called at the time, SaaS deployments of its products. All of the other suppliers offered perpetual licenses with one-time fees for on-premise deployments. By the way, RightNow also offered on-premise deployments but was working to phase them out in favor of the cloud.
Today, subscription licenses and cloud computing deployment have become the norm. For customers, cloud computing means much lower initial investment; much lower initial effort; few dependencies on environmental factors like server operating systems, web infrastructures, and databases; and much lower maintenance effort, as suppliers typically provide automatic updates for new versions and releases.
For suppliers, cloud computing means more stable financial performance without the worry of those $1+ million deals slipping out of quarters. It also results in easier and lower cost maintenance as every customer pretty much runs the same version of their software. (Note that many of our suppliers still offer perpetual licenses and on-premise deployment as an option.)
How Has the Competitive Roster of Technology Providers Changed?
There are similarities and differences in the rosters of our suppliers. While many of the names are the same, only eGain is the same supplier 4Q2012 as it as was in 4Q2007. And eGain Service today is just a new and (much) improved version of eGain Service in 2007.
Oracle has made the biggest impact on our roster of suppliers, acquiring ATG, InQuira, and RightNow. In products, Oracle ATG Commerce is Oracle’s key ecommerce offering. Oracle ATG Self-Service is gone. Oracle InQuira, paired with Oracle Siebel, is Oracle on-premise offering for customer service. Oracle InQuira provides search and knowledge management capabilities, still at the same level of functionality (but that’s a story for another time). Oracle RightNow CX Cloud Service is Oracle’s customer service offering for cloud deployment. It’s been integrated with Oracle Fusion marketing and sales application to create a cloud-based CRM suite. Most significantly, as we’ve mentioned in each of our quarterly Customer Service Update Reports since the acquisition closed in January of 2012, Oracle RightNow continues to introduce regular quarterly releases of Oracle RightNow CX Cloud Service. The offering is stronger now than it was before the acquisition.
InStranet was acquired by Salesforce.com in August 2008. InStranet Contact Centers In-Line has become the technology foundation to Salesforce Knowledge, the knowledge management component of Salesforce Service Cloud.
KANA, a public company in 4Q2007, was taken private in October 2009. KANA Service Solutions, a suite of customer service applications, have, for the most part, been removed from KANA’s product set. From 2008 to 2010, KANA made a huge investment to build a process-oriented customer service offering called Service Experience Management (SEM). SEM is part of the current KANA Enterprise. KANA Experience Analytics is based on technology that came to KANA in its 2011 acquisition of Overtone.
KNOVA, the supplier, was acquired by Consona Corporation in 2006. Consona Corporation merged with CDC Software in October 2012 to become Aptean. KNOVA, the knowledge management application was a strategic offering for Consona. At the moment, Aptean is trying to figure out where it fits within its very broad and overlapping product set.
How Have Customer Service Application Portfolios Changed?
In 4Q2007, customer service applications were case management applications, knowledge management applications, or email response management systems. We’ve never covered case management or email response management. Even when we started our customer service research 10 years ago, we felt that these apps had become commodities and that we could offer little value add in evaluating and comparing them.
In 4Q2012, the customer service application portfolio has grown, and customer service has become much more efficient and effective. Mobile, social, and the continual pressure to lower cost-to-serve have been the drivers. Only Knova remains a traditional knowledge management system. eGain Service, KANA Enterprise, Oracle RightNow CX Cloud Service, and Salesforce Service Cloud have all added mobile and social capabilities. Attensity Analyze and Attensity Respond provide social monitoring, analysis, and interaction. IntelliResponse, Next IT, and Nuance offer virtual agent products.
Virtual agents are a major refinement of knowledge management applications. They deliver a single answer or solution to customers’ questions or problems rather than hundreds or maybe thousands of knowledge items from which customers are expected to make a selection.
Pretty amazing. Customer service has come a long way in five years—new companies, new technologies, products, and applications, new channels, and new ways to license those applications. Progress for sure.
Customer Service Supplier and Product Update
4Q2012 Was a Very Good Quarter for Customer Service
By Mitch Kramer, Senior Consultant, Patricia Seybold Group, March 7, 2013