The Customer Service Market Keeps Consolidating: Consona And CDC Software Merge
Or perhaps I need to title this blog "Another One Bites The Dust" as this is just one more merger in the multitude of mergers and acquisitions that are happening in the customer service space.
On August 7, CSC Software merged with Consona Corporation to form a new entity called Aptean (see the press release about the news here). There have been no details communicated about the go-forward plan for both companies’ products, but here are my views about their respective CRM assets.
Consona, founded in 1986, has its roots in ERP. Over the years, it has acquired a number of ERP solutions, which include DTR, Cimnet Systems, AXIS, Encompix, Intuitive, Relevant, and SupplyWorks – which have good strengths in a variety of vertical markets. More recently, it has acquired an open-source, SaaS-based ERP software vendor, Compiere. In 2006, it made a foray into the CRM market by acquiring Onyx CRM and then KNOVA for knowledge management (2007) and SupportSoft (2009), a support automation vendor. Its recent CRM focus has been on customer support automation application for the high-tech vertical, as there is good synergy between CRM, support automation, and knowledge management for this user base.
CDC Software has had a similar acquisition history over the last 10+ years, which is best summarized here. It has acquired more than a dozen software and business services companies. It is currently organized into four internal business units, each of which focuses on a different aspect of automating, managing, and streamlining operations: CDC Front Office, CDC Manufacturing, CDC Supply Chain, and CDC Solutions for Microsoft.
The issued press release says that Aptean will continue to be focused on applications for enterprise resource planning (ERP), supply chain management (SCM), manufacturing operations management, customer relationship management (CRM), and enterprise performance management.
My focus at Forrester is on customer service solutions, and looking at Aptean’s CRM product portfolio, I see overlapping products, some of which have had a checkered investment history and success in the marketplace. Specifically:
- CDC Pivotal: Pivotal is a strong and mature product well suited for midsized organizations. Forrester placed CDC Software’s Pivotal solution in the Strong Performer category in its latest Forrester Wave™ evaluating CRM for large organizations and Forrester Wave evaluating CRM suite customer service solutions and as a Leader in the Forrester Wave evaluating CRM for midsize organizations. It does not generally offer industry-specific versions; however, it does have strength in the financial services sector. One point of worry is that Pivotal's go-forward road map featured mostly incremental improvements.
Consona’s CRM products have suffered market traction since their respective acquisitions. Consona’s knowledge management product for customer service, once a best-in-breed product, has suffered from lack of investment but had seen some renewed focus in 2011, with new releases, industry recognition, and customers upgrading to the latest version. The CRM product has not seen much recent investment. In July 2012, Consona rebranded its products by their original names (Onyx, SupportSoft and KNOVA) as an attempt to gain more market recognition about these products, and perhaps to seek buyers for these point solutions.
In the CRM space, Aptean has challenges ahead of it: (1) to decide whether to invest in its strong point products, some of which have loyal customer bases, or to spend the energy in trying to integrate products together, a strategy that historically has had less success; (2) to rationalize overlapping product road maps; (3) to clearly articulate upgrade and maintenance commitments to its existing customer base; (4) to decide whether to be committed to customer service or to CRM; (5) to be committed to the hi-tech vertical (which is not Pivotal's strength); and (6) to decide to walk away from historical assets that are no longer delivering value.