It’s exciting to see the news of yet another acquisition in the world of customer service with the announcement of KANA Software’s intent to acquire Sword-Ciboodle. Today’s customer service technology ecosystem is complex and comprised of a great number of vendors who provide overlapping and competing capabilities. I’ve previously blogged about what these critical software components are. The reason why these acquisitions are good is that they align with what customers want: a simpler technology ecosystem to manage from both a systems perspective and a contractual perspective. And suite solutions available from unified communications (UC), CRM, and workforce optimization (WFO) vendors are evolving and include comprehensive feature sets. These vendors have either built these capabilities out or acquired them via M&A activity — and we expect more M&A to happen.
Now, to focus on the Sword-Ciboodle acquisition. This acquisition, at a high level, is a win-win for both companies:
- KANA has historically sold point solutions for knowledge management, email, chat to the eBusiness owner, or owner of the digital communication channels within an organization, not to the owner of the contact center. Ciboodle has had the opposite challenge, historically selling to the owner of contact centers. This acquisition will allow deeper market penetration, targeting an increasing breadth of buyer profiles.
- KANA continues to strengthen its operations in Europe, which was quite thin prior to the acquisition of Lagan in 2010. Likewise, Ciboodle gains a stronger foothold in North America, which has always been a challenge for them.
- Both companies have overlapping, but also complementary product capabilities. KANA, for example, acquires from Ciboodle robust case management and BPM capabilities that are proven in the marketplace, and have referenceable customers. Ciboodle, acquires full featured, multichannel and knowledge management capabilities from KANA , which are today much less robust that what KANA offers.
- Both products code lines are compatible as they are java based products and adhere to the SOA standard.
The product roadmap plan is to leverage the strengths of both companies. This means that the go-forward roadmap will be focused around the Ciboodle platform instead of KANA’s existing Service Experience Management solution which has a relatively high cost of ownership. The Ciboodle platform will then be enhanced with the knowledge management, multichannel management, and social listening capabilities from the current KANA product line. On paper, its a good plan, however, the success of this acquisition will reside in the details:
- KANA has been on an acquisition streak in the last two years. It acquired Lagan, a government to citizen (G2C) CRM solution in 2010; Overtone, a social media listening company in 2011; Trinicom, a mid-market, cloud based multichannel customer service vendor in 2012. This is a lot of acquisitions that introduces short-term organizational and product roadmap challenges which can negatively impact the existing customer base.
- KANA has decreased and then restarted product investments in its older product lines in the last three years. This shift in direction has confused and alienated customers. KANA has now communicated that all customers on all products will be supported, and must stay true to this promise, and allocate resources wisely.
- KANA has an aggressive roadmap to integrate both solutions over the next 18 months. A successful execution will take discipline. They must focus on the right product integrations that make sense in the short term and clearly message this strategy to their existing customer base. In addition, KANA needs to define and support a migration path from all existing versions of the KANA and Ciboodle products to the new integrated solution.
Attention to these these sales, marketing, product direction, and customer service issues will make this acquisition successful.
