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 that 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, and 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 were 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 it.
  • 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 that adhere to the SOA standard.

The product road map plan is to leverage the strengths of both companies. This means that the go-forward road map will be focused around the Ciboodle platform instead of KANA's existing Service Experience Management solution, which has a high cost of ownership and has had very limited market penetration. 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, it's a good plan; however, the success of this acquisition will reside in the details:

  • KANA has been on an acquisition streak during the past two years. It acquired Lagan, a government-to-citizen (G2C) CRM solution in 2010; Overtone, a social media listening company in 2011; and Trinicom, a midmarket, cloud based multichannel customer service vendor in 2012. This is a lot of acquisitions, which introduces short-term organizational and product road map challenges that can negatively affect the existing customer base.  
  • To continue on this point, the management structure for the new organization is being worked out. This tension, coupled with the cultural differences of the two companies, will put short-term strain on the organization with the eventual loss of key personnel.
  • KANA has decreased and then restarted product investments in its older product lines in the past three years. This shift in direction has confused and alienated customers. KANA has now communicated that all customers on all products will be supported. It must stay true to this promise and allocate resources wisely.
  • KANA has a perhaps overly aggressive road map to integrate both solutions over the next 18 months. A successful execution will take discipline. The company must focus on the right product integrations that make sense in the short term and clearly message this strategy to its 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 sales, marketing, product direction, and customer service issues will make this acquisition successful.