CRM Vendor RightNow Buys Salesnet

On-demand customer relationship management (CRM) vendor RightNow Technologies, Inc. has announced the acquisition of Salesnet, Inc., an on-demand software firm focused on sales workflow automation.

Initial integrations between the Salesnet application and RightNow applications will be completed this summer with all major features expected to be included by summer of 2007.

Under the terms of the acquisition, RightNow has acquired Salesnet through an all-cash merger. RightNow expects the transaction to be neutral to cash flow from operations and dilutive to GAAP EPS in 2006.  

Salesnet’s corporate office in Boston will become RightNow’s Boston office and will continue to include development, sales, marketing and support functions.

Salesnet was acquired to “accelerate RightNow’s customer experience management development efforts by combining RightNow’s knowledge foundation with Salesnet’s workflow engine,” according to company officials.

With the acquisition, RightNow adds 26 employees and a dozen off-shore development contractors with experience in sales automation products to mid-market and enterprise customers.

“Our acquisition of Salesnet brings substantial sales workflow domain expertise to our business, accelerates our roadmap by more than a year and adds hundreds of customers to our client base,” Greg Gianforte, founder and chief executive officer at RightNow, said. 

Jonathan Tang, president and co-founder of Salesnet, will become vice president of sales products at RightNow.

Salesnet sold on-demand sales force automation, focusing on sales methodologies. The acquisition brings RightNow added expertise in customer-facing sales functions, as well as vertical expertise in financial services and business-to-business.

While it’s tempting to see the purchase as a move towards inevitable consolidation of the on-demand CRM space and a shot across the bow of salesforce.com, in an interview last fall Gianforte said that wasn’t the objective of RightNow.

“The big issue isn't who is going to dominate the on-demand space. It's the fact that the on-demand space is going to dominate the enterprise software market as a whole,” he told this reporter. “So instead of looking at on-demand as a single market that the three of us [salesforce.com, NetSuite, RightNow] are battling to dominate, it's probably better to see on-demand as a business model that's completely replacing an old-fashioned, low-ROI model that is becoming another artifact in the history of information technology.”

Based on that view, Gianforte said, “it really won't impact our ultimate success if, within the context of an on-demand market, salesforce.com does well providing sales automation solution to SMBs, because we're delivering a complete CRM solution for the enterprise.”

Salesnet provides tools needed to handle “more complex selling environments,” according to Denis Pombriant, managing principal at Beagle Research Group.

RightNow will support Salesnet’s existing customers and provide an upgrade path to other customer experience management products. Rich Perkett, chief technology officer and co-founder of Salesnet, will join RightNow as a director of product development, responsible for the integration and expansion of Salesnet’s technology into RightNow’s product.

David Sims is contributing editor for TMCnet. For more articles please visit David Sims’ columnist page.

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