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February 14, 2000

Merger Of Internet CRM Vendors Will Aid E-Commerce
Kana-Silknet deal will let companies handle all online customer-relationship management

By Jeff Sweat

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ana Communications Inc., an Internet customer-relationship management software vendor, last week revealed plans to acquire rival Silknet Software Inc. for $4.2 billion. The deal will let the combined company offer a complete CRM package for E-commerce that puts it in position to challenge traditional CRM vendors, such as Siebel Systems Inc.

Silknet and Kana sell CRM software for electronic interactions, but there's little overlap between their products. Silknet focuses on online customer service, while Kana's products help companies manage E-mail marketing campaigns and respond to customers' messages.

Priceline.com Inc. has been using Kana software for two years to manage its E-mail responses. When a customer sends an E-mail to Priceline.com, the software routes it to a representative, who can access answers from a knowledge database and generate a reply. Priceline.com says Kana has helped it respond to 80% of E-mails within three hours and 100% within six hours.

The Norwalk, Conn., E-commerce company also uses Silknet's E-business system to manage E-mail and call-center workflow among its 500 customer-service reps. For instance, questions about Priceline.com's mortgage products are handled by real-estate specialists, and Silknet's software ensures that happens, managing phone and Web interactions so a rep talking to a customer on the phone can see the customer's E-mail interactions with the company.

Priceline.com has long wanted to integrate the two products so it can easily connect E-mail and telephone interactions, says Andy Abowitz, Priceline. com's VP of operations and customer service. The fact that both products are Web-based helped them beat the competition. "Our business is on the Web, and to have anything but Web-based systems wouldn't make sense," he says.

Chris Selland, an analyst at the Yankee Group, says the Kana-Silknet combo is good news for customers because it means the vendors can address all facets of CRM on the Internet-sales, service, and marketing-on multiple channels: E-mail, Internet, chat, IP telephony, and conventional telephones.

Kana plans to offer basic integration with Silknet by the end of next quarter; a fully integrated suite will be available by year's end.

Kana rival eGain Communications Corp. last week spent $35 million for Big Science Corp., which develops artificial intelligence and natural-language technology.

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