RightNow Proves It Isn't Just The Other Salesforce.com

Upon hearing the term "software-as-a-service," most thoughts go straight to the Web browser, where said software is typically delivered as a service. The second largest software-as-a-service company, customer relationship management software vendor RightNow Technologies, wants to change that picture. On Thursday, the company will release the latest version of its flagship product, but instead of transmitting it over the Web, the company will deliver RightNow 8 via a small piece of downloadable software with a little more intelligence than the browser.

RightNow 8 is more of a software-plus-services model, but that doesn't mean RightNow CEO Greg Gianforte doesn't still see his product as software-as-a-service. To him, software-as-a-service is about delivering the bulk of the software via the Internet, and indeed, that's where almost all of RightNow 8's functionality lies.

Gianforte's an unabashed software-as-a-service champion, unafraid to call the big, bulky on-premise software companies like Oracle and SAP "the declining side of the industry." While he thinks on-premise isn't a growth business, RightNow -- which today has one-tenth the market cap of either SAP or Oracle -- is on the rise. Recurring revenue is expected to grow 40% this year.

Still, if the Web is what got RightNow to that point, there might be some head-scratching over the company going with a software client. Gianforte says the company had squeezed all the juice it could out of Ajax and a browser. "Ajax and Web 2.0 are great technologies for casual use, but for mission critical you need the capabilities of a desktop app," he says. With customers like the Transportation Security Authority and Medicare, mission critical means critical. Ergo the investment in .Net technologies reliant on SOAP protocols for the newest app.

One of the reasons for the emergence of software-as-a-service has been the sometimes poor performance of bloated client-side applications and the management headaches they bring. IT managers wouldn't be thinking out of turn, then, if they questioned adding yet another application when the point of software-as-a-service is that their hands remain relatively clean. Gianforte says he's convinced the RightNow 8 client is actually easier to download than the last version. Previously, users had to download two plug-ins, now they only download the smart client. It's not all about the shifting software model for RightNow. The new release also includes some significant and much-needed changes. The company was originally focused on customer service apps, but by RightNow 7, the software had become an amalgam of technologies acquired and roughly integrated as the company made purchases of companies like Salesnet. So it needed a complete overhaul regardless, according to Yankee analyst Sheryl Kingstone. Thus, a $25 million, two-plus year project resulted in RightNow 8.

Among the laundry list of new functionality included in RightNow 8 are two features that customize the app for specific customers' needs -- the Customer Experience Designer and the Workspace Designer, as well as RightNow Feedback to collect and respond to customer feedback in real-time. The Customer Experience Designer lets customers design and customize workflow processes, while Workspace Designer optimizes the user interface for specific job roles like marketing or sales, depending on the needs of the employee. RightNow 8 also embeds Microsoft Outlook into the user interface and features an analytics package.

One thing RightNow isn't considering is opening up its platform via the Salesforce.com method of creating an online marketplace in the form of AppExchange. "The number one complaint [customers] have about software vendors is that they can't be accountable to their customers, and there's no way I can be accountable to my customers if I show up and hand them a catalog and say pick anything you want," Gianforte says, adding that he's concerned AppExchange may turn Salesforce.com into a networked database so third parties can build applications on top. "What would prevent somebody like WebEx from offering an AppExchange API and offering it for $5 a month? [Salesforce.com isn't] going to be able to differentiate on that long term."

Gianforte says even the software-as-a-service delivery method alone isn't the end-all, be-all of differentiators. For the medium-term, however, the release of RightNow 8 should take RightNow a much-needed step toward bolstering its credibility in customer service and differentiating itself from the pack with its blended delivery model.