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Patricia Seybold Group / Product Update
Customer Service Supplier and Product Update 1Q2013 Was a Good
Quarter for Customer Service
By Mitch Kramer, Senior Consultant, Patricia Seybold Group May
30, 2013
NETTING IT OUT 1Q2013 was a good quarter for customer service,
the second good quarter in a row.
Customer growth was the quarters highlight. Clarabridge,
Creative Virtual, eGain, IntelliResponse, Moxie, and,
Salesforce.com all had good customer growth quarters in
acquisition, repeat business or both.
Financial performance reflected the good customer growth,
especially for eGain and Salesforce.com.
Product activity was about the same as last quarter. Five of our
suppliers introduced significant new products or major product
versions.
Company activity was up. The biggest news was Nuances
acquisition of VirtuOz, making a potentially major impact of the
virtual agent space.
Salesforce.com earned a Customer Service Star for 1Q2013 with
excellent and balanced performance across customer growth,
financial performance, products, and company.
Voice of the Customer (VoC) applications monitor and analyze
customer conversations on internal channels as well as on the
social web. Theyre critical customer service applications and
theyre hot. Attensity and Clarabridge are VoC suppliers.
IntelliResponse introduced a VoC app this quarter.
QUARTERLY REPORTS ON THE PERFORMANCE OF CUSTOMER SERVICE
SUPPLIERS AND THEIR PRODUCTS AND SERVICES
With this report, we begin our tenth year of quarterly updates
on the suppliers and products in customer service. These updates
focus on factors that are important in the evaluation, comparison,
and selection of customer service products. More specifically, we
examine these factors in our quar-terly updates:
Customer acquisition and overall customer growth
Product activity
Company activity including mergers and acquisitions,
partnerships and alliances, and hiring
Company financial performance
Directlink: http://dx.doi.org/10.1571/pr05-30-13cc
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In our evaluations of quarterly performance, we want to see
continuing customer growth, ongo-ing improvements in products,
steady company viability, and good financial performance. We dont
want to change our evaluations based on a quarters news, but we do
want to raise a red flag when that news deviates from a positive,
multi-quarter trend, or to wave a green flag when that news is
particularly good. When significant product and company events
occur, we identify and highlight those that could have an impact on
customer service products and technologies, suppliers, and the
market landscape.
Customer Service Suppliers and Products Here, in Table A, are
the customer service suppliers and products that we currently
cover:
Customer Service Suppliers and Products
Company Product Product Type
Attensity Attensity Analyze
Attensity Respond
Voice of the Customer monitoring, analysis, interaction
Creative Virtual V-Person Virtual agent
eGain Service Case management, knowledge management, social
monitoring, analysis, interaction
IntelliResponse Virtual Agent (VA) Virtual agent
KANA KANA Enterprise
KANA Experience Analytics
Knowledge, process management
Voice of the Customer monitoring, analysis, interaction
Moxie Spaces Knowledge management, agent and customer
collaboration
Next IT ActiveAgent Virtual agent
Nuance/VirtuOz VirtuOz Intelligent Virtual Agent
Virtual agent
Oracle RightNow Oracle RightNow CX Case, knowledge, process
management; Voice of the Customer monitoring, analysis,
interaction
Salesforce.com Service Cloud
Knowledge
Marketing Cloud (Radian6)
Case management, process management
Knowledge management
Social monitoring, analysis, interaction
2013 Patricia Seybold Group, Inc.
Table A. In this table, we list the customer service suppliers
and their products that we cover in this report.
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We made three changes to the list of suppliers and products this
quarter. Sadly, we dropped Aptean (formerly Consona CRM, formerly
Kanisa) and its Knova knowledge
management product. Aptean is the product of the August 7, 2012
merger of CDC Software (CDC) and Consona Corporation (Consona), two
software suppliers that were formed and grew through ac-quisition
and that have overlapping product lines. We had covered Consona,
its Knova offering, and their various predecessors for more than
nine years. Knova does not seem to be a very important of-fering to
Aptean. There has been no activity on it and no communication about
it since the merger. Its product, product marketing, and
communications staff have been reduced and/or reassigned. A new
version planned for early 2012 has not appeared.
We add Clarabridge, a Reston, VA-based supplier of Voice of the
Customer software. We pub-lished our evaluation of Clarabridge
Analyze, Clarabridge Collaborate, and Clarabridge Engage on March
28. Its a strong offering from a solid company.
We also add Creative Virtual, one of the leading four suppliers
of virtual agent software. (We al-ready covered the other
threeIntelliResponse, Next IT, and Nuancein these Quarterly
Customer Service Update Reports.) We published our evaluation of
Creative Virtual V-Person on September 29, 2012. Its an attractive,
widely used offering.
Calendar and Fiscal Quarters Note that these quarterly reports
accommodate the fiscal years of suppliers that dont run on the
calendar yearIntelliResponse and Salesforce.com both have fiscal
quarters that end a month later than calendar quarters. We wait for
them every quarter.
A Good 1Q2013 Customer service had a good quarter in 1Q2013.
Heres what we mean:
Customer growth was the quarters highlight. Clarabridge,
Creative Virtual, eGain, IntelliResponse, Moxie, and,
Salesforce.com all had good customer growth quarters in
acquisition, repeat business, or both. We dont have
quarter-over-quarter customer growth data for Clarabridge yet, but
it touched almost 25 percent of its customer base in 1Q2013.
Financial performance reflected the good customer growth,
especially for eGain and Salesforce.com.
Product activity was about the same as last quarter. Five of our
suppliers introduced significant new products or major product
versions.
Company activity was highlighted by Nuances acquisition of
VirtuOz, making a potentially major impact of the virtual agent
space. In addition, eGain and Salesforce.com made common
stock-related announcements. Oracle RightNow opened a cloud
computing center in Japan. Attensity has a new CEO.
In Tables B, C, and D, we present the details on customer
growth, product activity, and company activity for the quarter and
the year. Table B shows customer growth using arrows. To show
signifi-cant increases or decreases, we use double arrows. Table C
shows product activity, and Table 3D shows company activity. Our
suppliers are a mix of public and private companies. We collect
finan-cial performance metrics from the SEC filings of the public
companies. We estimate the financial performance of the private
companies as revenue ranges using the customer growth and deal
detail information that the private suppliers disclose to us. Were
uncomfortable presenting a table that
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contains a mix of the hard data from public companies with the
soft revenue range information from the private companies. Youll
find financial performance details for the quarter and for the year
in the individual supplier sections of this report.
1Q2013 Customer Growth
Supplier New Customers Repeat Customers
Attensity N/A N/A
Clarabridge N/A N/A
Creative Virtual eGain IntelliResponse KANA N/A N/A
Moxie Next IT Nuance N/A N/A
Oracle RightNow N/A N/A
Salesforce.com 2013 Patricia Seybold Group, Inc.
Table B. We summarize customer growth in this table.
1Q2013 Product Activity
Supplier Activity
Attensity Group Announces Attensity Respond 6.0
Clarabridge None
Creative Virtual None
eGain None
IntelliResponse Announces general availability of mobile app for
IntelliResponse Virtual Agent on Android and iOS
Announces general availability of IntelliResponse Virtual Agent
6.2
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1Q2013 Product Activity (continued)
Supplier Activity
KANA None
Moxie Announces integration between Microsoft Lync contact
center application and Spaces by Moxie
Next IT None
Nuance VirtuOz Intelligent Virtual Agent becomes Nina Web
Oracle RightNow Releases Oracle RightNow CX February 2013
Salesforce.com Announces Service Cloud Mobile
2013 Patricia Seybold Group, Inc. Table C. We summarize 1Q2013
product activity in this table.
1Q2013 Company Activity
Supplier Activity
Attensity J. Kirsten Bay named President and CEO.
Clarabridge None
Creative Virtual None
eGain Announces a public offering eGain shares by individual
eGain shareholders
IntelliResponse None
KANA Announces partnership with Sydney, AU contact center
outsourcer Salmat
Moxie None
Next IT Mary Cain, MPH, named to Next ITs Medical Advisory
Board
Announces partnership with Dan Barry, former NASA Astronaut, in
robotics
Nuance/VirtuOz Nuance acquires VirtuOz
Oracle RightNow Opens secure, cloud computing data center in
Japan
Salesforce.com Private offering and placement of common
stock
4:1 common stock split
2013 Patricia Seybold Group, Inc. Table D. We present a summary
of 1Q2013 company activity in this table.
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Company Activity Just a note about company activity. Our
suppliers issue many kinds of press releases. We cover
product related press releases in the Product Activity sections
of our reports. We cover company re-lated press releases in Company
Activity sections of our reports. Suppliers publish many types of
company related press releases. These types are important to our
analysis of quarterly performance:
Strategy, branding, and organizational announcements (see the
Clarabridge and Next IT section of this report), Organizational
activity
Mergers and acquisitions (see the Nuance section of this
report)
Executive and board appointments (see the Attensity and Next IT
sections of this report)
Financing and stock announcements (see the eGain and
Salesforce.com sections of this report)
Partnership activity (see the KANA section of this report)
Suppliers also make many other types of company announcements.
These most commonly in-clude customer acquisition and product
deployment announcements and announcements of recogni-tion by
(other) analyst firms about their products. While these
announcements are certainly important to suppliers, theyre not
germane to our analyses.
Salesforce.com Earns a Customer Service Star for 1Q2013 We award
Customer Service Stars to those suppliers that deliver outstanding,
improved, and bal-
anced performance across customer growth, products, financial
performance, and company activity for a quarter. Salesforce.com
earns a Customer Service Star for 1Q2013. Its customer growth and
fi-nancial performance were excellent. It introduced Service Cloud
Mobile, new capabilities for its cus-tomer service offering. It
made three company announcements about significant financing
activities.
Research Series on Virtual Agents We continued our research on
virtual agents in 1Q2013, although the product of our research,
an
update to our evaluation of IntelliResponse VA, was published in
2Q2013 on May 10. We now have current evaluations of the four
leading suppliers (alphabetically): Creative Virtual;
IntelliResponse; Next IT; and VirtuOz, now Nuance. The offerings
are similar. We had to dig a little to discover dif-ferentiators.
Basically heres how all of them work:
Customers enter a question, typically by typing in a text box on
the screen of a PC browser or mobile device app.
Virtual agents use Natural Language Processing (NLP) technology
select and deliver a single best, most suitable, or the one right
answer from their knowledgebase of answers.
Answers are usually presented as text with links for
additional/related information.
NLP technology is the core component of virtual agents and the
key IP of Creative Virtual, Next IT, and Nuance. Each has its own,
proprietary NLP implementation. Most are patented. Each does some
type of parsing, entity and fact extraction, and intent
identification/matching. Dictionaries of industry-specific,
application-specific, and business-specific terms improve their
accuracy and effec-tiveness.
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Deployment of these virtual agents requires configuring and
training the NLP technology, work that likely requires some
consulting help from suppliers, building the knowledgebase of
answers, and placing them appropriately within web and mobile
content.
IntelliResponse uses machine learning technology rather than
NLP. Virtual agents deployed on IntelliResponse VA deliver answers
with the accuracy of NLP-based virtual agents, and their
de-ployment and management is significantly faster and easier,
approaching self-service. See the In-telliResponse section of this
report for a bit more information. See our evaluation for the
detail.
Youll find virtual agents ready to answer your questions on the
web sites of telecommunications providers, airlines, retailers, and
financial services provides. If youve been avoiding them, by all
means, give them a try. They really do work. When they dont, its
more likely that deploying busi-nesses havent trained them
completely or built a complete knowledgebase than it is an issue
with virtual agent technology.
All of the virtual agents let customers escalate to chat with
live agents. Most of them integrate very nicely with external
applications. For example, Jenn, Alaska Airlines virtual agent,
which is a deployment of Next IT ActiveAgent, found flights for us.
Mobile device support and voice integra-tion are the hot new
features.
Nuance Acquires VirtuOz On the topic of virtual agent voice
integration, Nuance acquired VirtuOz. The acquisition is both
a validation and disruption. The leading virtual agent suppliers
were small, privately held companies, each with staff of 20 or
fewer developers. The combined virtual agent customer base is about
200 businesses. Nuance is a large, public company with thousands of
customers and a development staff that includes 1200 language
scientists. It will be that 500-pound gorilla in the virtual agent
market.
Social-Service Is Still Hot Social-service continues as a hot
customer service trend. The social web has become an impor-
tant customer service channel because customers use it to get
answers to their questions and solu-tions to their problems. Many
customers, especially B2C customers, use the social web as their
first source of answers and solutions. It is now a customer service
requirement for organizations to be lis-tening to and interacting
with their customers on the social web. Most of our suppliers have
begun to offer customer service support for the social web
channel.
Social-service is also a subset of Voice of the Customer (VoC)
products and applications. VoC offerings monitor and analyze
customer conversations on internal channels as well as social
channels and also provide facilities for interacting with
individual customers. Attensity and Clarabridge are VoC suppliers.
This quarter, Attensity and IntelliResponse made VoC announcements.
Attensity re-leased Attensity Respond 6.0, its application for
interacting with individual customers. IntelliRe-sponse introduced
VOICES, a VoC application that identifies the themes in the
questions that customers ask virtual agents on both internal and
social channels.
Now, lets get the details of 1Q2013 for our 11 suppliers.
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ATTENSITY
Attensity Has an Okay 1Q2013 1Q2013 was an okay quarter for
Attensity. The company did not provide customer growth data
for the quarter, so we could not analyze customer growth or
financial performance. However, Atten-sity made one product
announcement and one company announcement and both were
significant.
Note that 1Q2013 completes the first year for a new Attensity.
During 1Q2012, the firm spun out the professional services
organization of its EMEA division. The change reduced Attensitys
staff to approximately 140 from 300. The change focused Attensitys
strategy and resources on de-veloping, marketing, selling, and
supporting its software offerings Attensity Analyze and Attensity
Respond. The effect of the change was a reduction in customer
growth, especially additional busi-ness from existing customers,
and financial performance beginning in 2Q2012.
Customers Attensity has a base of approximately 170 current
accounts. While we have no customer growth
data for 1Q2013, last quarter, the firm acquired 5 new customers
and did additional business with 25 existing customers. Customer
acquisition was down. Repeat business was up.
Products Attensity offers two products: Attensity Analyze and
Attensity Respond. Attensity Analyze is Attensitys offering for
monitoring and analyzing the Voice of the Cus-
tomer (VoC). Attensity Analyze monitors and analyzes customer
conversations on internal chan-nelsemail, web, SMS, (snail) mail,
and, via voice message, telephone, as well as on the social
web.
Attensity Respond is Attensitys offering for responding to and
interacting with individual cus-tomer conversations on the social
web and on internal channels, such as Twitter, Facebook, and email.
Attensity Respond automatically classifies these conversations,
routes them, and queues them for handling by social-service and
marketing teams or traditional contact center staff.
Product Evaluation We published our evaluation of Attensity
Analyze and Attensity Respond on March 1, 2012.
Briefly, organizations license Attensity Analyze and Attensity
Respond for cloud or on-premise de-ployment. To date, Attensity
claims that 110 customer organizations have licensed Attensity
Analyze and that 60 customer organizations have licensed Attensity
Respond.
Attensitys social-service offerings earn excellent grades on the
Customer Social-Service Report Cardexceeds-requirements grades in
analytic functionality and in customer service integration, and
meets-requirements grades in product viability and company
viability. No major improvements are needed.
Attensity Analyze and Attensity Respond best fit customer
social-service with these characteris-tics, characteristics that
drive their selection:
Deep analysis of customer conversations through powerful and
sophisticated technology Large volumes of customer conversation
data Large B2C organizations
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Product Announcements Attensity made one product announcement
during 1Q2013. On March 11, the firm announced
the release of Attensity Respond 6.0. New and improved
capabilities include:
A new ADA-compliant and iPad compatible web UI Access to the
Twitter Firehose data stream Improvements to automatic
categorization of incoming documents Improved monitoring and
reporting Integration with Jive forums and Salesforce CRM
As we mentioned above, Attensity Respond eared excellent grades
in our 1Q2012 evaluation of its previous version. The improvements
in 6.0 strengthen its listening, analysis, and interaction
capa-bilities.
Company Attensity made one company announcement during 1Q2013.
On January 30, the firm announced
that J. Kirsten Bay was appointed President and CEO to succeed
Ian Bonner, who will continue as chairman of the board. Most
recently, Bay had been vice president of commercial business of
iSIGHT Partners, a cyber intelligence/risk management firm.
Careers Attensity Group has a staff of 140. This quarter, there
are 8 openings posted on the careers sec-
tion of its web site: three in development, three in sales, one
in customer support, and one internship. There were 10 openings
last quarter.
Financials These factors have been the bases for our estimates
of Attensitys financial performance:
Typical deal size of $350k/year for Attensity Analyze
Typical deal size of $300k/year for Attensity Respond
Consulting services for implementing Attensity Analyze are
approximately 30 percent of year one license fees
Consulting services for implementing Attensity Respond are
approximately 25 percent of year one license fees
Customer base of 170 accounts, most with cloud deployments
Without customer growth data, we cannot offer estimates of
financial performance. Note, though, that for 4Q2012, we estimated
that 5 new customers and additional business with 25 existing
cus-tomers generated revenues in the range of $7 million to $11
million.
Our Take on Attensity Group Based on its product and company
announcements, Attensity had an okay quarter in 1Q2013.
Going forward, we hope that the firm will give us the input from
which we can perform and docu-ment a more complete analysis.
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CLARABRIDGE
Clarabridge Has a Very Good 1Q2013 Clarabridge had a very
good1Q2013. Very good customer growth drove very good financial
per-
formance. The firm did not make any product or company
announcements during the quarter, but, early in 2Q2013, it
rebranded its offering and introduced a major new product
version.
Customers Clarabridge has a base of approximately 250 current
accounts. In 1Q2013, the company told us
that it had 3.5 percent growth in new customers and repeat
business from 20 percent of its customer base. That sounds like 8
to 10 new customers and additional business from 45 to 55 existing
custom-ers. Touching 23.5 percent of its base or approximately 60
of 250 customers in a quarter is very good customer growth.
Products Clarabridge offers three products: Clarabridge Analyze,
Clarabridge Collaborate, and
Clarabridge Engage. Clarabridge Analyze monitors, analyzes,
reports on, and alerts on customer conversations on social and
internal channels. Its analyses use text analytics technologies to
uncover meaning, intent, and sentiment, and to classify them within
a flexible hierarchy of categories that represent customers
emotions and businesss products and services, policies, procedures,
applica-tions, and staff. Analyzes reports are built around the
volume and sentiment of customers conversa-tions within these
categories. Its alerts are sent to Collaborate and/or Engage for
their handling and management. Collaborate manages all alerts and
provides facilities for handling alerts on trends in volume,
sentiment, and satisfaction of customers conversations on social
channels, internal channels, and within documents. Engage provides
facilities for handling alerts on individual customers posts,
messages, and feedback that require response on Facebook, Twitter,
or emailcustomer social-service alerts.
Clarabridge Analyze was introduced as the Clarabridge Content
Mining Platform in October 2007. Clarabridge Collaborate was
introduced in March 2012. Clarabridge Engage was introduced in
November 2012. Clarabridge 5.5 which was released in November 2012.
Clarabridge 6.0, the current version, was released in April
2013.
Product Evaluation We published our evaluation of Clarabridge
Analyze, Clarabridge Collaborate, and Clarabridge
Engage on March 28, 2013. Organizations license Clarabridge
Analyze, Collaborate, and Engage, for cloud or on-premise
deployment. Ninety percent of Clarabridges customer base has
deployed the products in the cloud, Two factors, both product
strengths, differentiate Clarabridge Analyze, Clarabridge
Collaborate,
and Clarabridge Engage:
Powerful and configurable monitoring and analysis of customer
conversations in multiple languages on social and internal
channels
Configurable, classification-based alerting, routing, and
management of customer conversations that require handling and
response
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Text analytics and sentiment analytics technologies are the key
strengths and differentiators of the offering. These technologies
facilitate fast, automated, and consistent analysis of all customer
conversations on all channels in multiple languages and the
identification of individual customer posts, messages, and feedback
that require responses.
Clarabridges offerings for social-service earn good grades on
our Customer Service report Card for
Social-ServiceExceeds-Requirements grades for the critical
Monitoring and Analysis criterion and Meets-Requirements grades in
Product Viability and Company Viability. Their Needs-Improvement
Grade in Customer Service Integration should improve soon through
planned en-hancements in future product versions.
Product Announcements Clarabridge did not make any product
announcements in 1Q2013 but, going forward into
2Q2013, introduced Clarabridge 6.0 on April 18. The new version
has three significant new features:
Report Distribution. This new capability lets administrators
distribute personalized, localized, and relevant reports to
individual stakeholders on demand or via a schedule.
Insights Analysis. This new facility provides wizard-based
comparison and analysis of customer conversations and feedback
across multiple variables.
Support for Big Data. Clarabridge 6.0 supports Hadoop via
HBase.
Company Clarabridge did not make any made any company
announcements during 1Q2013. Going for-
ward into 2Q2013, on April 8, the company introduced a new
corporate logo, launched a new web site, and rebranded its products
all built on Intelligent Customer Experience, the firms new
strat-egy and messaging. Clarabridge defines Intelligent CEM as an
iterative process with these four steps:
Listen to customers posts, messages, and feedback on social and
internal channels.
Analyze customers posts, messages, and feedback for meaning,
intent, and sentiment. Also, classify them for fast, consistent,
and appropriate action.
Operationalize the insights of analysis within the applications
and processes of the customer experience.
Measure the effect of operationalization; repeat.
Clarabridge had focused its messaging and branding on its IPtext
analytics technologies. The new focus is on the application of the
technologies to improve customer experience and deliver business
benefits.
This new focus is timely and relevant. It will help the market
understand how Clarabridge can deliver business value. (Note that
our product evaluation was based on this new strategy and
brand-ing. Clarabridge had given us pre-release information.)
Careers The Careers section of Clarabridges web site lists 14
openings4 in engineering, 3 in sales, one
in customer service, 5 in professional services, and 1 in HR.
There were 15 openings last quarter. Clarabridge has a staff of
approximately 120 employees.
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Financials Clarabridge is a private company. It does not
publicly report its financial performance. We esti-
mate financial performance from customer growth data using these
factors:
Customer base of 250 accounts, 90 percent with cloud
deployments
1Q2013 customer growth of 3.5 percent in new customers and of
additional business from 20 percent existing customers
Deal-specific pricing ranging from $50,000 to $2.5 million
For 1Q2013, we estimate that Clarabridge generated revenues in
the range of $7 million to $11 millionvery good financial
performance. In the Company Viability section of our product
evalua-tion, we had estimated that 2012 revenues were in the range
of $25 million to $42 million.
Our Take on Clarabridge Clarabridge had a very good quarter in
1Q2013, highlighted by very good customer growth and
very good financial performance. From our evaluation, we learned
that the firm has a strong product offering in a hot space. With
the new messaging and rebranding in early 2Q2013, Clarabridge has
positioned itself for a very good year.
CREATIVE VIRTUAL
Creative Virtual Has a Good 1Q2013 Creative Virtual had a good
1Q2013. With five new customers, customer acquisition was the
highlight. Creative Virtual did not make any product or company
announcements.
Customers During 1Q2013, Creative Virtual acquired five new
customers and did additional business with
two existing customers. The firm has a customer base of 36
accounts. Touching seven in a quarter is very good customer
growth.
Products and Product Evaluation Creative Virtual V-Person is the
Creative Virtual product offering. Its a virtual agent. We pub-
lished an evaluation of V-Person on September 12, 2012. Briefly,
heres how V-Person works:
V-Person deploys on web sites, mobile devices, and social
networks.
Customers (or users) enter a question, and virtual agents
directly deliver a suitable answer or enter into a question and
answer dialog with the customer to gather additional input to
qualify an ambiguous question to deliver a suitable answer at the
end of the dialog.
V-Person applies deployment-specific rules to question content
to generate patterns from the content of customers questions and
then matches those patterns with the patterns of knowledge items on
which the same rules had been applied in building the
knowledgebase.
Answers can include data from external applications, such as
CRM, ERP, and customer service applications.
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V-Person packages a comprehensive knowledge management system
called V-Portal that includes tools, services for creating,
editing, managing, and publishing knowledge, and reporting and
analysis capabilities.
V-Person supports customers questions and knowledgebase answers
in English. Support for additional languages may be added through
professional services engagements.
V-Person earns very-good grades on the Customer Service Report
Card for Virtual Assisted-ServiceExceeds-Requirements for Answers
and for Analytic Functionality; Meets-Requirements for Question
Analysis and Matching, Customer Service Integration, Product
Viability, and Company Viability.
V-Portal, V-Persons knowledge management system, is the most
significant strength and dif-ferentiator. Its truly a complete
content management system. The specification and maintenance of the
rules that V-Person uses to match customers questions with answers
from its knowledgebase are the critical elements in successful
deployments. Theyre the most complex and difficult, too.
Product Activity Creative Virtual did not make any product
announcements during 1Q2013.
Company Creative Virtual did not make any company announcements
during 1Q2013.
Careers The careers section of creativevirtual.com lists a total
of nine job openings across the UK, the
US, and Australiatwo a new development group for future products
and seven in customer and technical support. Hiring is aggressive.
Creative Virtual has a staff of approximately 50 employees.
Financials Because Creative Virtual is privately owned, it does
not publish statements about its financial
performance. We can try to use the data that the firm does
publish and the data that it has given us to attempt an estimate
financial performance.
Customer base of 36 accounts that are split 50/50 between cloud
and on-premise deployment.
Annual subscription license fee based either on the volume of
virtual agent conversations across all channels or a per channel
fee with an unlimited volume of virtual agent conversations, where
channels are web, mobile, and social.
A fee for setup services ranging from $250 to $800 per question.
The setup services fee range depends upon complexity and
availability of data. Annual management fees of approximately 50
percent of setup services fees.
Entry-level year-one subscription license fee is approximately
$100,000.
Based on its customer growth information of five new customers,
and repeat business with two existing customers, we estimate that
revenues in 1Q2013 were in the range of $1.5 million to $3
mil-lion.
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Our Take on Creative Virtual Creative Virtual had a good quarter
in 1Q2013, driven by very good customer acquisition. This
company has a strong offering in a hot market segment. 2013
should be a good year for Creative Vir-tual.
EGAIN
A Good 1Q2013, eGains 3QFY2013 eGain had a good calendar 1Q2013,
its 3QFY2013. Customer growth was up. Financial per-
formance improved as a result. eGain made one company
announcement and no product announce-ments during the quarter.
Customers eGains direct sales force focuses exclusively on
acquiring enterprise customer accounts. Part-
ners target small and mid-sized organizations as well as
organizations in Europe, Asia, and the Pa-cific. The company offers
on-premise and hosted single-tenant licensing options for its
products.
Because eGain does not disclose customer numbers, we use license
revenue and recurring reve-nue as proxies for eGains customer
growth. License revenue comes from sales of on-premise li-censes
for eGains products. Recurring revenue comes from subscription
licenses for hosted deployment and from maintenance and support
contracts. In any given quarter, the combination of license revenue
and recurring revenue is the sum of what new customers spend for
software and what existing customers spend for additional software
and software maintenance. That maps pretty well to customer growth
but without the detail of numbers of customers, numbers of deals,
and the split between new customers and existing customers.
We present license and recurring revenue for calendar 2012 and
the most recent five quarters in Table E.
eGain License and Hosting Revenue
2012 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13
License 9.2 2.8 2.3 0.7 3.4 4.1
Recurring 27.1 5.8 6.3 7.2 7.8 8.3
eGains fiscal year ends on June 30 2013 Patricia Seybold Group,
Inc.
Table E. eGains license and recurring revenue for calendar 2012
and its five most recent quarters are presented in this table.
Looking at Table E, customer growth was good for eGain this
quarter. Both license revenue and
recurring revenue were up for the quarter. The lumpiness of
license revenue is what wed expect for a supplier selling
high-ticket software to large enterprisesbig deals slip from some
quarters and close in others. Recurring revenue has had a slow but
steady rise, reflecting a growing base of hosted deployments. That
growth was up again this quarter, the fifth quarterly increase in a
row. eGain has built a solid and predictable revenue stream.
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Products Just a reminder. eGain offers customer service
products.
eGain Service Suite provides multi-channel case management,
response management, and knowledge management capabilities.
eGain Sales Suite provides marketing and customer service
capabilities for B2C web sites. Marketing capabilities are
contextual offers and promotions. Customer service capabilities
adapt eGains knowledge management and customer interaction
technology to web merchandising and ecommerce support.
eGain Social Experience Suite provides social-service
capabilities, monitoring the social web, analyzing monitoring
results, and responding to/interacting with social web posters.
Product Activity eGain did not make any product announcements
during 1Q2013, its 3QFY2013.
Company eGain made one company announcement during 1Q2013, its
3QFY2013. On February 13, the
firm announced that certain of its shareholders made a public
offering of 2,170,000 shares of com-mon stock at a price of $6.75
per share. Proceeds of the sales of these shares go to the
shareholders. eGain will not receive any proceeds from the
sale.
This offering looks like an opportunity for shareholders to
cash-in without disturbing the market. eGain traded between $7.48
and $7.99 during February 2013 with an average volume of
approxi-mately 50,000 shares.
Financials Financial performance improved slightly across all
metrics for eGain in its 3QFY2013. The
highlight was the continued and improved profitability. We
present eGains financial metrics for cal-endar year 2012 and the
most recent five quarters in Table F.
eGain Financials
2012 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13
Revenue 47.5 11.5 10.6 10.7 14.7 15.5
Recurring revenue 27.1 5.8 6.3 7.2 7.8 8.3
Net income GAAP (6.9) (1.2) (3.4) (2.9) 0.6 1.0
($millions); eGains fiscal year ends on June 30 2013 Patricia
Seybold Group, Inc.
Table F. eGains financial metrics for calendar 2012 and the five
the most recent quarters are shown in this table.
With one quarter left, Gains raised its guidance for revenue and
cloud revenue growth for the remainder of its FY2013. eGain will
become a $50 million company cloud revenues of more than $30
million.
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Careers The careers section of eGains Web site lists 56
openings: 10 in engineering, 5 in marketing, 9 in
professional services, 22 in sales, 3 in technical support, 3 in
cloud computing, and 4 in G&A. Hiring is up. eGain had 42
openings last quarter and 28 openings two quarters ago. The firm
has approxi-mately 275 employees.
Our Take on eGain While eGain was relatively quiet in product
and company activity, customer growth and finan-
cial performance were up for the second quarter in a row.
Investments in staff and in marketing are paying off. Notably,
cloud computing now comprises two thirds of eGains revenue, and
eGain has a run rate exceeding $50 million.
INTELLIRESPONSE
IntelliResponse Has a Mixed 1Q2013, Its 1QFY2014 IntelliResponse
had a mixed 1Q2013, its 1QFY2014, which ended on April 30. Product
activity
was the quarters highlight as IntelliResponse added significant
and innovative new features and ap-plications to its virtual agent
offering, IntelliResponse VA. On the other hand, customer growth
was down a bit in the quarter. Financial performance was down a bit
as a result.
Customers During its 1QFY2014, IntelliResponse acquired six new
customers and did additional business
with two existing customers. New customers include Arvest Bank,
Cornell University, and Optus, Australias second largest
telecommunications provider. Customer growth was down a bit from
the very high levels of growth in the previous three quarters.
IntelliResponse has a base of 161 customers. The firm offers
only hosted multi-tenant deploy-ment of its products. Its new
customers sign up for an average contract length of over two years.
Touching eight customers in the quarter is a reasonable level of
customer growth. In Table G, we show customer growth for
IntelliResponse.
IntelliResponse Customer Growth
FY2013 1QFY2013 2QFY2013 3QFY2013 4QFY2013 1QFY2014
New customers 32 3 8 10 11 6
Repeat business 26 7 7 5 7 2
IntelliResponses fiscal year ends on January 31 2013 Patricia
Seybold Group, Inc.
Table G. Customer growth for IntelliResponse is summarized in
this table.
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Products IntelliResponse offers the IntelliResponse Virtual
Agent (VA). Its virtual agents deploy in the
cloud on web, social, and mobile channels in a number of visual
styles, each with a distinct brand and user experiencesingle
question/answer, chat-bot, and animated digital character. They can
understand questions that customers ask in any language, and, on
mobile devices, they can under-stand spoken questions and can speak
answers.
IntelliResponse VA was introduced in 2001. To date, 161
organizations have licensed it for more than 450 product-specific,
application-specific, language-specific, or channel-specific
deployments. IntelliResponse has, by far, the largest customer base
among virtual agent suppliers.
Product Evaluation IntelliResponse Virtual Agent (VA) is
IntelliResponses product offering. Its a virtual agent. We
published an evaluation of IntelliResponse VA on May 9, 2013.
Briefly, heres how it works:
IntelliResponse VA virtual agents deploy on web sites, mobile
devices, and social networks.
Customers ask questions by entering text in a search box, in a
chat box, or, on Android and IOS devices, by speaking. Virtual
agents deliver a single right answer within the text or speech
context of customers questions.
Customers ask questions as text strings of words and phrases.
IntelliResponse VA virtual agents deliver answers as text with
images, links, and/or URLs or as spoken words, phrases, or
sentences. IntelliResponse offers integration services for
including data from external applications within answers.
IntelliResponse VA uses translation facilities of Google and
Nuance for language support. As a result, customers may ask
questions and receive answers in most Western and Asian
languages.
IntelliResponse VA uses rules-based machine learning technology
to match customers questions with answers. IntelliResponse VA
stores and manages answers; prototypical questions, which are
called Representative Questions; and matching rules, which are
called Criteria, in a knowledgebase. Analysts specify answers and
Representative Questions to deploy instances of IntelliResponse VA.
IntelliResponse VA automatically generates matching rules.
IntelliResponse VA packages integration with chat, email,
contact center, web self-service, community, and social network
applications.
This is a very strong offering that earned excellent grades on
our Report Card for Virtual As-sisted-ServiceExceeds-Requirements
grades in Answers, Analysis and Matching Customers Ques-tions,
Analytic Functionality, and Product Viability; and
Meets-Requirements grades in Customer Service Integration and
Company Viability.
IntelliResponse VAs distinguishing feature and key
differentiator is fast and easy deployment. It uses machine
learning technology for analyzing and matching customers questions,
and it includes facilities and tools that IntelliResponse has built
specifically to automate the generation of matching rules and to
improve accuracy through their refinement with virtual agent usage.
IntelliResponse VA automates most deployment tasks. IntelliResponse
VAs clients have only to specify a small number
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of representative or prototypical questions (IntelliResponse
calls them RQs for Representative Ques-tions) and the knowledge
items that answer them. The technologies do the restgenerating
rules (In-telliResponse calls them Criteria) that match the
possible variations of RQs to knowledgebase answers at design time
and using those rules to analyze and match customers questions at
run time. IntelliResponse VA also provides facilities to extend and
refine RQs and matching rules to improve effectiveness and expand
scope. The approach is simple, elegant, and, over the years, proven
to be effective and increasingly efficient. Virtual agents
typically deliver the One Right Answer 85 to 90 percent of the
time. And virtual agent deployment can approach a self-service
process.
Product Activity IntelliResponse made three product
announcements during 1Q2013, its 1QFY2014. On February 7, the firm
announced the availability of i.Suggest, a new feature for
IntelliRe-
sponse VA. i.Suggest is a major enhancement to the products
question analysis and matching capa-bilities. It mimics the style
of predictive search, delivering suggested answers as customers
type their questions. However, where conventional search approaches
look for exact matches on question con-tent, i.Suggest uses
IntelliResponses patented matching technology to determine the
intent of cus-tomers questions to suggest the most appropriate
match. Results from beta customers demonstrated a 21 percent
improvement in answer accuracy and a 22 percent reduction in
customer effort (the number of questions customers ask in a single
session to complete a task).
On February 28, IntelliResponse announced that IntelliResponse
VA mobile device apps for were available in the Apple App Store and
Google Play marketplaces for current customers to assist them in
integrating IntelliResponses patented virtual agent technology into
their own mobile appli-cations.
Also, without a formal announcement, in April, IntelliResponse
introduced two new applica-tions: VOICES and OFFERS. OFFERS is a
marketing application that delivers targeted offers within virtual
agents answers. Think of OFFERS as one right answer coupled with
one right offer. In-telliResponse VA is the first virtual agent
product to include a marketing/recommendation applica-tion.
VOICES is a new Voice of the Customer analytic application for
IntelliResponse VA. It applies NLP and statistics analytics to
customers questions on web, agent, mobile, and social channels to
identify their themes or topics. VOICES then presents the results
of this analysis within visual and interactive word cloud-style
charts,each theme is shown a cloud or a bubblethat make it easy to
understand the themes that it identifies. See Illustration 1.
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VOICES Theme Bubbles
2013 IntelliResponse Systems, Inc.
1. This illustration shows the credit card themes over the last
month largest bubbles show the most important themes.
VOICES analyzes all questions of all customers across all
channels. It extends the application of
IntelliResponse VA from virtual-assisted customer service to
VoC, from delivering answers to cus-tomers questions, to providing
customer service, product, and even marketing staff with
information critical to developing, implementing, measuring,
analyzing, and refining their strategies, plans, and programs.
VOICES is a powerful analytic application for IntelliResponse VA, a
significant strength and differentiator.
Company IntelliResponse did not make any company announcements
during its 1QFY2014.
Careers The careers page of Intelliresponse.com lists three job
openingstwo in sales and one in cus-
tomer service. The firm had two openings last quarter. It has a
staff of 55 employees and contractors.
Financials Because IntelliResponse Systems is privately owned,
it does not publish statements about its fi-
nancial performance. We can try to use the data that the firm
does publish and the data that it has given us to attempt an
estimate of its financial size and direction. Here are the
financial data ele-ments:
161 customers and over 450 deployments
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Entry price of $25,000 and typical deal size of approximately
$100,000 for IntelliResponse VA
Based on its customer growth information of six new customers,
and repeat business with two existing customers, we estimate that
revenues in 1QFY2014 were in the range of $1.5 million to $3
million.
Our Take on IntelliResponse While its 1QFY2014 was mixed,
IntelliResponse is positioned for good to excellent quarters
ahead. VOICES, OFFERS, i.Suggest, and improved language support
significantly strengthen In-telliResponse VA, the leading virtual
agent offering in the market. In addition, IR told us that the slip
in customer growth resulted from delayed decision making by very
qualified prospects. So look for higher levels of customer growth
and financial performance.
KANA
KANA Has an Okay 1Q2013 KANA had an okay 1Q2013. A partnership
with Sydney, AU contact center outsourcer Salmat
for using KANA Enterprise as its agent desktop was the quarters
highlight. The firm did not make any product announcements,
although it announced a major new version of KANA Enterprise early
in 2Q2013.
Note that KANA, a privately held company, no longer provides us
with customer or financial da-ta.
Products KANA has four strategic offerings: KANA Enterprise,
KANA Lagan, KANA Express, and
KANA Experience Analytics.
KANA Enterprise is KANAs customer service offering for large
commercial organizations. It includes agent desktop, case
management, knowledge management, process management, web
self-service, live chat, social community and social listen and
respond, and email response management capabilities. Approximately
400 customer accounts have implemented KANA Enterprise components,
including 50 former Ciboodle accounts. KANA acquired Ciboodle in
2Q2012. Its mobile device support and its case management, process
management capabilities for contact centers will be integrated into
the next major version of KANA Enterprise.
KANA Lagan is a G2C (Government to Citizen) customer service
offering for large, local government organizations with agent
desktop, case management, knowledge management, web self-service,
mobile, analytic, and integration components. KANA acquired Lagan
Technologies, the developer of the product, in November 2010. Lagan
Technologies was founded in 1994 in Belfast, Ireland. KANA Lagan
has a customer base of approximately 250 government bodies.
KANA Express is the firms cloud-based customer service offering
for mid-sized businesses and government organizations. This
offering provides web self-service, email and knowledge management,
contact management, live chat and chatbot, social community and
listen and respond, and campaign management capabilities. KANA
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Express is based on technology that KANA acquired with Trinicom,
then a privately held, Wilp, Netherlands-based supplier with 50
employees in April 2012. KANA Express has a customer base of
approximately 250 accounts.
KANA Experience Analytics is KANAs social-service offering. Its
a standalone product, an integrated component of KANA Enterprise
and, soon, of KANA Express that provides monitoring and analysis of
the social web and internal channels and interaction with social
web and internal channel posters. Approximately 20 customer
organizations have licensed KANA Experience Analytics (and its
predecessor product OpenMic).
These product lines address requirements for assisted-service,
self-service, and social-service for businesses and government
organizations of all sizes virtually worldwide.
Product Activity KANA did not make any product announcements
during 1Q2013. However, going forward into
2Q2013, the firm made a major product announcement on April 16a
major new version of KANA Enterprise. KANA called it the biggest
product launch in its history.
This new KANA Enterprise integrates, unifies, streamlines, and
extends the previous KANA En-terprise version with the key
offerings of KANAs recent acquisitions: the contact center
manage-ment offering of the former Ciboodle and KANA Experience
Analytics, the social-service offering of the former Overtone. Its
capabilities include case management; knowledge management; chat;
co-browsing social listening, analysis, and interaction; and email,
campaign, and white mail manage-ment. It supports contact center,
web, social, and mobile channels. KANA organizes and packages KANA
Enterprise into these components:
KANA Enterprise Agent Experience KANA Enterprise Web Experience
KANA Enterprise Social Experience KANA Enterprise Mobile
Experience
KANA told us that process support in the new KANA Enterprise is
lighter weight. Developers reused process technology from the
former Ciboodle. The IBM technology stack is no longer a
pre-requisite.
KANA Enterprise offers a reasonable migration path for those of
KANAs customer base still running KANAs legacy technologies. KANA
Enterprise also has the breadth of functionality to compete with
Oracle RightNow Cloud Service and Salesforce Service Cloud for new
customers. Were anxious to evaluate it in detail.
Company KANA made one company announcement during 1Q2013. On
March 27, the company an-
nounced a partnership with Salmat, a Sydney, AU provider of
customer communications solutions. Salmat handles 60 percent of all
business to consumer communications and 25 percent of outsourced
telephone calls in Australia. Within the partnership, Salmat will
implement will base its offerings on the KANA Enterprise agent
desktop.
This appears to be a very good partnership for KANA. It will
yield very broad use of KANA En-terprise in a new geography.
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Careers The Careers section of kana.com currently lists 22
openings 10 in R&D, 1 in sales, 5 in con-
sulting services, 4 in IT, 2 in technical support. There were 42
openings last quarter. KANA has a staff of approximately 700
employees.
Our Take on KANA KANA had an okay quarter in 1Q2013. The
partnership with Salmat was the highlight. The new
version of KANA Enterprise positions KANA for future
quarters.
MOXIE SOFTWARE
Moxie Has an Okay 1Q2013 Moxie Software met its goals in 1Q2013.
Customer acquisition was the highlight. Moxie made
one product announcement and no company announcements during
1Q2013. Financial performance was about the same as last
quarter.
Customers Moxie Software acquired 10 new customers and did
additional business with 70 existing cus-
tomers in 1Q2013. New business was up as compared to last
quarter. Repeat business was down. Moxie has a customer base of
approximately 500 active customer accounts. Touching 80 in the
quar-ter is good customer growth. We summarize Moxie Softwares
recent customer growth in Table H.
Moxie Customer Growth
2012 1Q2012 2Q2012 3Q2012 4Q2012 1Q2013
New customers 50 15 13 11 6 10
Additional customers 306 61 79 84 82 70
2013 Patricia Seybold Group, Inc.
Table H. Customer growth for Moxie Software is summarized in
this table.
Products Spaces by Moxie, which was announced on March 21, 2012,
is Moxies product offering. Spaces
integrates the former Customer Spaces and Employee Spaces into a
converged offering that supports customer communications, employee
collaboration, and, most significantly, customer/employee
col-laboration.
Customer Spaces was Moxies customer service offering. Its
capabilities are built on the founda-tion of Moxie Software
Knowledgebase, which has been rebranded to Knowledge Spaces in
Spaces by Moxie. Customer Spaces supports customer engagements
across Moxies Channels productsEmail, Chat, Answer, Click to Call,
Phone, and CoBrowse.
Employee Spaces was Moxies internal collaboration and social
networking offering. Its capa-bilities are also built on the
knowledge management foundation of Moxies Knowledgebase and around
the way people work: with people, in groups, and on projects.
Social networking capabilities include subgroups, blogs, wikis,
discussions, documents, ideas, calendars, and listeners.
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We list and briefly describe Spaces components below.
Knowledge Spaces is the rebranded Moxies Knowledgebase, a
comprehensive knowledge management offering.
Email Spaces, Chat Spaces, Click to Call Spaces, and CoBrowse
Spaces provide customer communication capabilities. Moxie and its
predecessor companies, nGenera and Talisma, have offered them for
quite some time.
Social Media Spaces is Moxies social web monitoring, analysis,
and interaction platform.
Phone Spaces provides CTI integration.
Collaboration Spaces comprises the subgroups, blogs, wikis,
discussions, documents, ideas, calendars, and listeners of Employee
Spaces expanded to includes partners and customers to the this
social networking.
Spaces Connect is an integration framework that includes APIs
and packaged connectors to external CRM, ERP, content management,
and HR applications.
Spaces by Moxie is a strong offering with broad and deep
capabilities. Built around a knowledge management core, Spaces
supports a broad range of channels including the social web. Its
support for assisted-serviceEmail Spaces, Chat Spaces, Click to
Call Spaces, CoBrowse Spaces, and Phone Spacesis especially deep.
Collaboration Spaces is the key component. Enabling open
col-laboration among customers, partners, and internal staff can be
a great approach to resolving com-plex problems and issues
effectively and efficiently.
Product Activity Moxie made one product announcement during
1Q2013. On March 19, the firm announced inte-
gration between Spaces by Moxie and Microsofts Lync contact
center application. This integration extends Lync with the
knowledge management, email management, chat, co-browse, and social
net-work interaction capabilities of Spaces. Contact center
applications remain the core applications of most customer service
organizations and the sales organizations of businesses that sell
from the in-side. Aligning and integrating with Microsofts Lync
improves Moxies value proposition.
Going forward into 2Q2013, on April 22 Moxie announced that it
would offer Collaboration Spaces for free. Makes sense. The core
capabilities of Salesforce Chatter, the key competition for
Collaboration Spaces, are free, too.
Company Moxie did not make any company announcements during
1Q2013.
Careers The Careers section of Moxie Softwares Web site lists 32
openings: 8 in development, 1 in
marketing, 7 in sales, 9 in customer support, and 7 in cloud
computing services. There were 28 open-ings listed last quarter.
Moxie Software has a staff of 200.
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Financials Moxie Software is privately held. So, there were no
financial releases or regulatory filings on its
financial performance for the quarter. Weve been using
information about customer growth to cre-ate an estimate of
financial performance.
We base our estimates of financial performance on customer
growth data.
In 1Q2013, Moxie Software acquired 10 new customers and did
additional business with 70 existing customers. New business was up
and repeat business was relative to last quarter.
The firm generates hosting revenue from approximately 250
customers.
In addition, Moxie Software has professional services revenue
from new customer implementations and expert services and training
provided to existing customers.
Summing these revenue elements, we estimate Moxie Softwares
1Q2013 revenue to be in the range of $10 million to $15 million,
about the same as our estimates last quarter.
Our Take on Moxie Software Moxie made a quiet start to 2013.
After a down 4Q2012, customer acquisition rebounded to the
good level of previous quarters. A drop in repeat business kept
financial performance flat. Very stra-tegically, in products, Moxie
tightened integration between Spaces and Microsoft Lync.
Integrations and partnershipswith Salesforce.com and Nuance as well
as Microsoftwill be the drivers for what could be a very good
2013.
NEXT IT
Next IT Has a Very Good 1Q2013 Next IT had a very good 1Q2013.
Customer growth continued at a high level, resulting in good
financial performance. Alme (pronounced All-me) is the new brand
for its virtual agent offering. Next IT also expanded its Medical
and Technical Advisory Boards.
Customer Growth During 1Q1023, Next IT acquired one new customer
and did additional business with five exist-
ing customer. On a base of 20 customer accounts, touching 6 in a
quarter is very good customer growth.
Products Formerly known as ActiveAgent, Alme is Next ITs virtual
assisted-service offering. It deploys
on web pages and mobile devices, presenting a software avatar
and a text box that invites customers and/or users to ask it a
question by entering a text string or speaking to it and delivering
a best match answer comprising of text, links, and/or web pages in
response.
Organizations purchase subscription licenses for cloud
deployment of Alme or perpetual licenses for on-premise deployment.
To date, Next IT claims that approximately 20 customer
organizations have licensed their technology. Next IT offers
professional services to help ensure successful de-ployments and to
help in their ongoing refinement and management.
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Product Evaluation We published an evaluation of Next IT Alme
(then called Active Agent) on November 29, 2012. Alme earned
very-good grades on the Customer Service Report Card for Virtual
Assisted-
ServiceExceeds-Requirements grades for Answers, for Question
Analysis and Matching, and for Analytic Functionality, and
Meets-Requirements grades for Customer Service Integration, Product
Viability, and Company Viability.
Based on our evaluation of Customer Service Best Fit, the key
drivers for selecting Next IT Al-me are:
Deep natural language analysis of customers questions and
delivery of very sophisticated answers that can integrate data from
external applications
Virtual agents that can understand and speak any language
Solution that combines software technology and consulting
services
Large, B2C organizations
Almes key strength is its capability to deliver very
sophisticated answers to complex questions. Rather than simply
presenting the web page that customers can use to find and select
their flights, ActiveAgent prepared the web page using content from
the customers question and integration with the application.
Like most of the virtual assisted-service offerings that weve
evaluated, Alme is not software that deploys quickly and easily out
of the box. Organizations that deploy it will have to invest in
learning, using, deploying, and managing its natural language
technology. Again, like all the virtual assisted service offerings
that weve evaluated, Next IT provides consulting services to help
its cli-ents with these tasks. Early deployments of Alme were
managed completely by Next IT. Recently, Next IT has begun to give
its clients the training and product documentation that promote
less de-pendence on consulting services and more self-sufficiency.
Note, though, clients face no price pen-alty for using consulting
services. Entry-level and typical prices that include consulting
services are in line with competing offerings.
Product Activity Next IT made one product announcements 1Q2013.
On March 22, Next IT launched Alme, a
new brand for its virtual agent offering. To go along with Alme,
the firm also launched a new web site. Next IT positions Alme to
provide the personalized service of a concierge while delivering
the business benefits of a technology-based self-service solution.
Note that Alme implements the cur-rent release of Next ITs patented
natural language processing technology, Its the release that we
evaluated last fall.
Company Next IT is one of the pioneers in virtual
assisted-service. The firm was founded in 2002 in Spo-
kane, WA and introduced its first virtual assisted-service
offering in 2004. Its privately held com-pany with a staff of
approximately 140 employees.
In addition to Alme, Next IT has three other customer service
offerings: Alme for Account Ac-cess, Alme for Chat, and ActiveChat.
Alme for Account Access is a specialized implementation of Alme,
which helps customers unlock their accounts and sign up for new
services. Alme for Chat of-fers to optimize existing web chat by
handling the high volume, low value customer service online chats.
ActiveChat is a web chat application for live customer service
reps/agents.
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Company Activity Next IT made three company announcements during
1Q2013. On January 24, the firm an-
nounced that robotics pioneer and former NASA astronaut Dan
Barry had joined its Technical Advi-sory Board. On February 6, Next
IT announced that Mary Cain, MPH, had joined its Medical Advisory
Board.
Careers The Careers section of Next ITs web site lists six job
openingstwo in development, one in
sales support, two in customer support, and one an intern. There
were seven openings last quarter. Next IT has a staff of 160.
Financials Next IT generates revenue from product licenses,
maintenance fees, and consulting services.
Maintenance is included in subscription licenses for cloud
deployments. For perpetual licenses, Next IT charges an annual
maintenance fee that ranges between 15 percent and 25 percent of
the license fee. Year one fees for an Alme deployment range from
$150,000 to more than $1 million for a soft-ware license and an
initial deployment consulting engagement.
Based on customer growth of one new customer and additional
business from five existing cus-tomers, wed estimate that Next ITs
revenue for 1Q2013 ranged from $5 million to $7 million.
Our Take on Next IT Next IT had a very good 1Q2013, highlighted
by strong customer growth and a new brand, Alme.
The firm is off to a good start in 2013, after an excellent
4Q2012.
NUANCE
Nuance Acquires VirtuOz Without a formal announcement by either
Nuance or VirtuOz, several third parties reported on
January 10, 2013 that Nuance would acquire or had acquired
VirtuOz. The companies confirmed the acquisition in a product
announcement on March 5, an announcement of Nina Web. Nina Web adds
the capabilities of the former VirtuOz Intelligent Virtual Agent to
Nina Mobile and Nina IVR, very nicely enhancing Nuances virtual
assistant platform.
Nina IVR, introduced five years ago, is the original Nina
offering. Nina IVR uses Nuances speech recognition technology
within the IVR environment. Nina Mobile, introduced in late 2012,
uses speech recognition and text-to-voice technologies to deliver
virtual assisted-service on Apple iOS and Google Android mobile
devices. Nina Web, introduced on March 5, 2013, uses the
technol-ogy of the former VirtuOz Intelligent Virtual Agent, to
deliver text-based virtual assisted-service on the web and on
mobile devices.
Nuance Nuance Communications is a public company (NASDAQ: NUAN)
founded in 1992, based in
Burlington, MA, and staffed by more than 12,000 employees. The
company describes itself as a leading provider of voice and
language solutions for businesses and consumers around the world,
positions these solutions to reinvent the relationship between
people and technology, and charac-
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terizes its technology as intelligent, natural, and accurate. A
staff of more than 1,200 speech scien-tists and an IP portfolio of
over 3,900 patents certainly support the characterization.
Nuance offers its solutions to healthcare, mobile and consumer,
enterprise, and imaging market segments. The company organizes
itself into four Divisions along these segments. Nuance delivers
its solutions through products, through hosting/cloud computing
services, and within professional service engagements.
Offerings of the Enterprise Division use speech recognition,
natural language understanding, text-to-speech, biometric voice
identification, and analytics technologies. The offerings automate
caller identification and authorization, implement virtual
assistants, perform call steering, and assist in the completion of
tasks such as data retrieval and update and automated outbound
notifications. The Enterprise Division offers Nina.
VirtuOz VirtuOz, Inc. was a privately held and venture-financed
company with a staff of approximately
50 employees. The firm was founded in 2002 in Paris, France and
introduced a virtual assisted-service product. The firm came to the
US in 2009, opened a US headquarters site in Emeryville, CA, and
introduced a US version of the product the same year. By the end of
2012, VirtuOz had a cus-tomer base of approximately 25
accounts.
Nina Web, Nee VirtuOz Intelligent Virtual Agent We published an
evaluation of VirtuOz IVA on July 26, 2012. Its very strong.
VirtuOz IVA
helps businesses deploy virtual agents that are software avatars
built on natural language processing and knowledge management
technologies. Four features characterize and differentiate VirtuOz
IVA:
Application of natural language processing (NLP) technology and
text analytics technology to understand customers questions and
match them with a single right answer.
Support for three virtual agent response styles: direct
(customers ask a question; VirtuOz delivers an answer), guided
response (virtual agents provide answers that navigate customers to
web pages that contain complex, detailed or multi-media content),
and proxy response wherein virtual agents actually complete tasks
on behalf of the user (e.g., process a return, update an account
profile, enroll people in a rewards program).
Tight and packaged integration with external applications,
currently from Live person, Moxie Software, and Salesforce.com.
Two types of virtual agents. Micro-Agents are special-purpose
virtual agents that support a narrow domain, shipping, password
recovery, or order management, for example. Their specialization
makes Micro-Agents fast and easy to deploy. Intelligent Virtual
Agents (IVAs) are general-purpose virtual agents that support wide
domains, marketing, sales, or support, for example.
VirtuOz earned very good grades on the Customer Service Report
Card for Virtual Assisted-Serviceexceeds-requirements grades in all
virtual agent technologies (answers, question analysis and
matching, and customer service integration) and meets-requirements
grades for analytic func-tionality, product viability, and supplier
viability.
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We recommended VirtuOz for large B2B and B2C organizations in
North America and Western Europe that want to add virtual
assisted-service to their customer service portfolio to support
web, mobile, and social channels for answering customers question
across the entire customer lifecycle.
Product Activity Nuance made two products announcements about
Nina during 1Q2013. On February 6, the com-
pany announced language and device support enhancements in a new
release of Nina Mobile. Nina Mobile now understands and speaks 38
languages and supports Android and Apple tablets. This new release
was available at announcement in an SDK.
On March 5, as we mentioned above, Nuance announced Nina Web,
the offering built on the technology of VirtuOz IVA.
Company Activity The acquisition of VirtuOz was the big company
news for the Enterprise Division of Nuance
during 1Q2013.
Careers The Job Listings section of nuance.com lists more than
250 openings across all business func-
tions, including 28 openings within NLP. Nuance has a staff of
more than 6,000 employees.
Our Take on Nuance Nuance has very recently begun work to
integrate the former VirtuOzs organization and the
former VirtuOz IVAs technology. Nuance has the resources, the
experience, and the expertise to lead the virtual agent market.
Well be watching the companys next moves.
ORACLE RIGHTNOW
On January 25, 2012. RightNow, the publicly held, Bozeman,
MT-based software supplier, be-came the Oracle RightNow Global
Business Unit (GBU), and RightNow CX the customer service product
suite has become Oracle RightNow Cloud Service.
Note that Oracle does not provide any visibility into the
customer growth or the financial per-formance of its GBUs. So we
cannot provide analyses in those areas. We will offer an Oracle
Right-Now section of our Quarterly Customer Update Reports with
some detail on products, business unit announcements, and
hiring.
ORACLE RIGHTNOW HAD A BUSY QUARTER IN 1Q2013
Oracle Was a Busy in 1Q2013 for Oracle RightNow Cloud Service
During 1Q2013, the Oracle introduced Oracle RightNow Cloud Service
February 2013 and an-
nounced a new, secure cloud computing data center in Japan for
hosted deployments. Hiring contin-ues to be very aggressive.
Note that Oracle does not provide any visibility into the
customer growth or the financial per-formance of its applications
and the organizations that develop and maintain them. So we cannot
provide analyses in those areas. We will offer an Oracle RightNow
section of our Quarterly Cus-tomer Update Reports with some detail
on products, relevant company announcements, and relevant
hiring.
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Product Activity Oracle made one product announcement about
Oracle RightNow Cloud Service in 1Q2013. Con-
tinuing its string of consecutive quarterly product releases, on
February 27, Oracle RightNow re-leased Oracle RightNow Cloud
Service February 2013. Oracle RightNow Policy Automation is the key
new feature. It provides facilities and tools designed to generate
self-service answers to custom-ers questions about a businesss
policies such as benefit eligibility, welfare payments, tax
obliga-tions, education course credits, license and permit
eligibility, or insurance premiums through dynamically generated,
context-sensitive questionnaires.
Policy Automation is a useful and valuable feature. Customers
frequently have questions within application processes in financial
services, healthcare, government, and education. Delivering
an-swers within the context of application processes is difficult
for contact center agents and for cus-tomer self-service
facilities.
Interestingly, delivering answers to these kinds of questions
has been the driver for the virtual agent market. Oracle describes
the new feature as delivering the right answers at the right time.
That sounds very similar to the tag lines of virtual agent
suppliers. For example, Creative Virtual V-Person delivers the
single right answer and IntelliResponse VA delivers the one right
answer. Different approaches and different technologies but both
improve the customer experience.
Company Oracle made one company announcement relevant to its
Oracle RightNow offerings 1Q2013. On
March 25, the company announced the opening of a cloud-computing
data center in Japan. A local cloud-computing data center
demonstrates Oracles commitment to the Japanese market
and makes Oracles cloud-computing portfolio more attractive to
Japanese businesses.
Aggressive Hiring There are 140 job openings listed on
http://www.oracle.com/us/corporate/careers/index.html for
the Oracle RightNow, down from 167 job openings last quarter.
Hiring in sales continues to be is es-pecially aggressive.
Our Take on Oracle RightNow Oracle RightNow has a strong
identity within Oracle, and it continues to thrive after four
quar-
ters of doing business within Oracle. The quarterly release of
Oracle RightNow Cloud Service, Ora-cles new cloud-computing data
center in Japan, and continued growth of the Oracle RightNow staff
prove Oracles commitment to and benefit from Oracle RightNow Cloud
Service.
SALESFORCE.COM
A Very Good Quarter in 1Q2013 Salesforce.com had very good
quarter in 1Q2013, its 1QFY2014, which ended on April 30, 2013.
Customer growth was excellent. Top-line financial performance
set another company record. Sales-force.com balanced the quarter
with one product announcement and three company announcements
during the quarter, earning a Customer Service Star.
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Customers Beginning with its financial release and SEC filing
for 3QFY2012, SFDC has stopped publishing
detailed customer growth data. However, because SFDC offers
subscription licenses for all of its products and also offers
support services on a subscription basis, subscription and support
revenue, a data item that SFDC has consistently reported, is a
reasonable proxy for customer growth. We show subscription and
support revenue in the second row of Table I, which presents
financial performance metrics.
Subscription and support revenue grew by $56.7 million to $842.2
million in 1QFY2014, a quar-terly increase of more than seven
percentexcellent customer growth.
Based on customer growth data that Salesforce.com has released
in the past, we estimate that the roughly $57 million in increased
subscription and support revenue represents new and additional
business by approximately 13,300 customers and that SFDCs customer
base has grown to approxi-mately 165,000 accounts.
Note that, on September 19, 2012, at Dreamforce, Salesforce.coms
annual user conference, the firm stated that the customer base for
Service Cloud was 34,000 accounts, about 20 percent of the to-tal
customer base.
Products Salesforce.com offers these applications, all for
deployment in its cloud:
Sales Cloud provides sales force automation capabilities.
Service Cloud is the customer service offering. Case management
capabilities are packaged. Knowledge management capabilities are an
add-on feature.
Marketing Cloud, which was introduced during 3Q2012, provides
campaign management capabilities, advertising capabilities, and
listening, analysis, and interaction capabilities for social
networks.
Desk.com is an entry-level customer service and help desk
offering.
Chatter is an enterprise-class collaboration application. Its
feeds are messages published to subscribing users and user groups
through SMS or email. Feeds can attach files or use Salesforce
Chatterbox to share files internally within an enterprise.
Data.com is a sales and marketing application that provides
company profile data and individual business contact data.
Force.com Platform is the cloud computing infrastructure on
which all of Salesforce.coms applications are implemented.
Salesforce.com makes the platform available as the foundation for
its customers to build, implement, and deploy their own cloud
computing applications.
Heroku is a multi-language cloud application platform that
allows developers to build and deploy apps in Java, Ruby, Python,
Scala, Clojure, or Node.js.
Database.com is a cloud-based, multi-tenant RDBMS available for
developers of applications that are developed, implemented, and
deployed on Force.com.
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Salesforce Site.com is a web content management system for
websites built, implemented, and deployed on Force.com.
Remedyforce is an IT help desk application.
Do.com is a mobile collaboration application that lets
workgroups create and share tasks, projects, and notes.
Work.com, the formerly named Salesforce Rypple, is an HCM/HR
application with capabilities for social performance
management.
Product Evaluation We published an evaluation of Service Cloud
and the customer service capabilities in Salesforce
Winter 13 on January 24, 2013. Salesforce provides a wide range
of customer service capabilities: account management, case
management, knowledge management, process management, internal
communities, and social net-work management. Service Cloud is the
Salesforce application that provides the case management
capabilities and serves as the anchor for a collection of tightly
integrated but variously packaged and priced features and
additional applications that provide the rest.
The customer service capabilities of Salesforce Service Cloud
Winter 13 earned very good grades on our Report Card for Customer
Service. We awarded Exceeds-Requirements grades for core
capabilities and channel support, knowledge management, UI content
management, and com-pany viability. The offering Meets Requirements
for search and product viability and Needs Im-provement in analytic
functionality.
Service Cloud will be a Customer Service Best Fit for a very
wide range of requirements. This offering is wide and deep. The key
drivers for its selection are:
Very wide set of rich cross-channel customer service
capabilities B2B and B2C organizations of all sizes in all
geographies A collection of separately licensed applications and
application features Easy upgrade from Salesforce CRM Sales
Cloud
Product Activity During calendar 1Q2013, Salesforce.com made one
product announcement. On February 26, the
firm announced Service Cloud Mobile, adding support on mobile
devices for:
Co-browsing Branded communities Chat Service Cloud Touch
(capabilities for creating and managing cases)
Branded communities, chat, and Service Cloud Touch were
generally available on the date of announcement. Branded
communities and Service Cloud Touch are no-charge features that are
in-cluded in Service Cloud. Chat is a separately priced add-on at
$50 per user. Co-browsing, also a sep-arately priced add-on, is
planned for general availability in 2H2013, at which time its
pricing will also be announced.
Company Salesforce.com made three company announcements during
calendar 1Q2013, all financial. On
March 11, the company announced a private placement of $1
billion in unsecured, unsubordinated,
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convertible senior notes to qualified institutional buyers. The
company stated that it would use the proceeds for acquisitions of
or investments