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RightNow acquires Salesnet for SFA

Salesnet's sales force automation will combine with RightNow's service applications to provide one on-demand CRM product, executives said.

RightNow Technologies Inc. today purchased Salesnet Inc. for $9 million, bringing its customer service tools together with Salesnet's sales force automation.

Bozeman, Mont.-based RightNow will acquire the privately held Salesnet, its 26 employees, and a dozen offshore contractors in an all-cash transaction. Both companies deploy their CRM on-demand or via the Software as a Service (SaaS) model, though RightNow also offers an on-premise option.

The market for CRM applications, SaaS in particular, has undergone rapid change in the last three years. Siebel Systems Inc. initially decried the model after an unsuccessful attempt to launch its own on-demand application and then jumped back in with a second release and the acquisition of UpShot. SAP also joined the race with its release of SAP Sales OnDemand and announced plans for went public in 2004.

For more on CRM as a service

See how some companies are extending on-demand beyond CRM

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The move provides RightNow with a more complete sales offering and should place it in more direct competition with as well as opening new opportunities, according to Denis Pombriant, managing principal at Stoughton, Mass.-base Beagle Research.

"It was a smart move. I think it adds a very robust and powerful SFA capability for sophisticated, complex selling. The strength that RightNow brings is its call center and service angle," Pombriant said. "If they add sales to the service center idea, they could still produce something unique and go after different markets."

RightNow executives termed the deal a "buy versus build" decision.

"This is not a new direction for us but a rapid acceleration of our existing roadmap," RightNow's CEO Greg Gianforte said.

The acquisition will add domain expertise in sales automation, advance RightNow's product roadmap by a year, and bring "several hundred customers, including enterprise customers," Gianforte said. Both companies provide an average of 65 seat deployments in the enterprise market.

RightNow will have completed user interface integration with Salesnet products by the end of this summer. For example, a Salesnet customer will be able to look up a customer service ticket in RightNow, and a RightNow customer will be able to look up a sales figure.

Integration will be complete by 2007.

RightNow launched a  sales and marketing module in late 2004 and is scheduled to release the next version, entitled "Castle," this summer. Customers seeking a pure sales force automation product with a complex sales process will be offered Salesnet, while companies seeking a combination of sales and service or sales and marketing will be offered RightNow, Gianforte said. All new customers will be provided the same upgrade path.

Salesnet's Boston headquarters will become a RightNow office, and Salesnet president Jonathan Tang will become vice president of sales solutions at RightNow.

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