Microsoft Dynamics CRM gains key technology and team on customer assets with its acquisition of Parature for an undisclosed sum.
The acquisition, the division's largest to date, "shows its seriousness about customer experience", notes Ray Wang, founder and principal analyst of Constellation Research.
Wang says the acquisition is significant for both Parature and Microsoft Dynamics customers because the start-up fills a key gap in the Microsoft offering.
Parature is an East Coast software start-up success story founded in 2000 by five Cornell students including Duke Chung.
Originally named Cyracle Technologies, its first product addressed the live chat market.
Microsoft CRM currently has a customer care offering that delivers core customer service with case management, universal queuing and routing, and light scheduling and field service.
Parature provides key self-service knowledge base software, core customer service, live chat, mobile access, survey and feedback capabilities, social monitoring, and Facebook portal capabilities to the Microsoft service offering.
Wang notes Microsoft's core strengths have come from the sales automation product and the tight integration with Office. Since 2012, with the arrival of corporate vice president, Bob Stutz, the Dynamics CRM team has sought to round out the rest of the customer experience offering. Stutz, Wang points out, was key in the development of Siebel CRM and SAP CRM.
The acquisition, meanwhile, adds 70 million end users to Microsoft Dynamics CRM ecosystem.
Wang notes Parature has built a strong foothold in key industries such as education, gaming, high-tech, non-profit associations, online media, public sector, and travel. These include technology companies Asure Software, Hitachi Data Systems and IBM.
Implications to customers and competitors
Wang says Parature's relentless focus on customer success has led to tremendous growth, with the company doubling its end user count from 35 million in 2011 to 70 million in 2013.
Microsoft will need to retain key Parature talent and augment them to continue this level of momentum, he says. More importantly, Microsoft will need to maintain the same level of marketing and sales support if it hopes to maintain the growth trajectory. "This may prove to be challenging given the current One Microsoft reorganisation in progress."
Wang says Dynamics CRM is the fastest growing part of the Microsoft Dynamics franchise, and the unit is giving Salesforce.com the most competition in head to head deals.
As with any major acquisition, Parature customers should make sure that existing contracts and key personnel continue into the next 12 months, says Wang.
Microsoft Dynamics CRM customers, meanwhile, should consider the new customer care offerings in future investment plans.
Dynamics CRM partners, on the other hand, should get to know the Parature product lines as soon as possible in order to increase cross-sell opportunities.
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