Customers.com Technologies

How Is Customer Service Technology Changing?

How Did Customer Service Technology Fare in 2012?

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.

Customer Service Suppliers Poised for Growth in 2012?

Each quarter we review the state of the customer service industry by providing updates on the nine top suppliers (after industry consolidation): Astute, Attensity, Consona, eGain, IntelliResponse, Kana, Moxie, Oracle, and Salesforce.com.

The first quarter of 2012 was not a good quarter in customer service. After a big 1Q2011, 2011 faded through the next three quarters as customer growth and financial performance were mixed, and product and company activity were relatively light. The fade has continued into 1Q2012.

But no fading for Salesforce.com. SFDC had another huge quarter, continuing its string of consecutive quarters, the latest better than the previous. IntelliResponse had some large deals and shifted from educational institutions to more commercial accounts.

The surprise in Q1 was Oracle RightNow. After Oracle’s acquisition of RightNow closed on January 25, Oracle RightNow began operating as a Global Business Unit, hiring aggressively and introducing regular, quarterly product releases. When Oracle announced its intent to acquire RightNow on October 24, 2011, we felt and we wrote that, post-acquisition, RightNow could quickly lose its identity and its brand and its product could disappear within Oracle’s very large software portfolio. Not the case. No losers in this acquisition. The new Oracle RightNow is bigger and is growing faster than the old RightNow.

Salesforce.com launched a new entry-level customer service offering called Desk.com, which is based on the technology that it obtained in its September 12, 2011 acquisition of Assistly. The firm also launched Salesforce Rypple, its first HCM/HR application that adds social networking to performance management. The product is based on the technology that came to Salesforce.com in its December 15, 2011 acquisition of Rypple.

In fact, Salesforce.com and Oracle make us optimistic for the remainder of 2012. All of the other suppliers have new and refreshed offerings that can help organizations address requirements, especially for social-service and for customer service processes. It’s an election year in the U.S. The economy, certainly the corporate world, appears to be growing. Corporate growth means more customers, and more customers means more customer service.

Here's my quarterly Customer Service Supplier and Product Update for 1Q2012.

Oracle on a Customer Service Spending Spree

The biggest news in customer service in the past quarter (3Q2011) was the October 24th announcement of Oracle’s intention to purchase RightNow. In a bit less than 12 months, Oracle has acquired three customer service suppliers: ATG, InQuira, and RightNow. All three address gaps in Oracle’s product offering. Let’s take a closer look at these purchases.

Oracle acquired ATG for its ecommerce software and customer base. ATG Commerce has been the leading ecommerce system among high-end retailers for many years. The acquisition also gave Oracle some attractive customer service offerings: ATG Instant Service and ATG Knowledge. ATG InstantService is a cloud-based chat offering that ATG acquired in January 2010. ATG Knowledge is a knowledge management offering based on technology that ATG received when it bought Primus Knowledge Solutions in 2004. Of the two, ATG Instant Service is more valuable to Oracle. It can be deployed to provide chat-based escalation from self-service to assisted-service for any of Oracle’s self-service ecommerce and customer service applications. Regarding ATG Knowledge, ATG has maintained, but has not improved, its capabilities since they redeveloped it in JAVA and deployed it on the ATG Wisdom platform. (Primus was originally built on the Windows platform.) While there are still a few Primus customers, we don’t think that Oracle will be any more aggressive than ATG was with the product, perhaps simply maintaining it.

Oracle to Acquire ATG

Big news in ecommerce last week. On November 2, Oracle announced its intention to acquire ATG. This is a $1 billion acquisition that will close during 1Q2011 when Oracle buys all of ATG’s stock at $6.00 per share. $1 billion is about five times ATG’s current revenue. The $6.00 price per share is almost a 50 percent premium over recent share prices.

The companies describe the rationale for the acquisition as their approach to addressing the requirement for cross-channel commerce, a requirement driven by a convergence of online and traditional commerce. That approach is a unified CRM, retail and commerce platform. Oracle has the CRM and retail systems. ATG brings the commerce, commerce that includes merchandising and customer service as well as the traditional catalog, shopping cart, transaction processing, and account management.

The rationale makes sense. There is absolutely a cross-channel commerce requirement. Ecommerce suppliers had begun to address in the past two or three years with merchandising, shopping carts, and transaction support on mobile channels, social channels. They’ve also begun to support the contact center channel with offerings that put the standard ecommerce applications on agents desktops with added capabilities for order management, returns and refunds, and account management. ATG Commerce already supported mobile and social channels. ATG Commerce Service Center, an add-on feature, provided contact center support. (We evaluated it in March 2008.) However, ATG Commerce does not provide the marketing, sales, customer service, and account management capabilities of CRM systems. It also does not have the order management and distribution capabilities of retail systems. That’s the stuff that Oracle brings to the deal. In time, a unified, cross-channel commerce, CRM, and retail platform could result.

Integrated Customer Service Knowledge Management Needs to Span Self-Service, Assisted Service, Case Management, and Contact Center Solutions

The Web and the contact center are the two critical channels for cross-channel customer service—the Web for self-service and the contact center for assisted-service. Customer portals are the mechanism for delivering self-service on the Web. Agent desktops are the mechanism for delivering assisted-service through the contact center.

Knowledge management-based customer service offerings can be the key to delivering customer service across both these channels. For Web self-service, they typically offer portal-like UIs. For contact center-based assisted-service, their integration with the case/incident capabilities of the agent desktops in contact center offerings can be the key to helping agents/CSRs deliver more effective, more efficient, and more consistent customer service. InQuira iConnect provides that integration between its InQuira 8 knowledge management offering and leading contact center products.