April 8, 2005
By Coreen Bailor, (former) Associate Editor, CRM Magazine

E-Service Providers Ride the Forrester Wave

Forrester Research recently released "The Forrester Wave: eService, Q1, 2005," its assessment of the top vendors within the space based on 117 criteria across segments including product offering, strategy, and market presence. The functional modules evaluated include cross-enterprise integration/business process management, customer history, desktop search tools, email response management, interaction tracking, knowledge base, search technology, Web collaboration, and Web self-service.

The research firm interviewed vendor and user companies, including eGain Communications, InQuira, iPhrase Technologies, Kaidara, KANA, Kanisa, KnowledgeBase Solutions, Nahava, Pacific Whistle, Siebel Systems, and ServiceWare Technologies. Those who rode the Forrester Wave include eGain, iPhrase, KANA, KnowledgeBase, RightNow, and ServiceWare.

Clustered into the leaders section are eGain, iPhrase, KANA, and KnowledgeBase, which was acquired by multichannel applications provider Talisma in March. ServiceWare, which merged with Kanisa in February (in March the combined companies were renamed Knova Software), along with RightNow, were cited as strong performers. No vendors were positioned in the contenders or risky bets sections.

KANA, which outpaced all vendors in the strategy segment with a score of 4, is the forerunner for complex Web collaboration, according to the report. In January 2004 KANA acquired Hipbone, an online customer-interaction solutions provider, a move described by John Ragsdale, vice president and research director at Forrester Research, as providing "the vendor with the strongest Web-collaboration tools of the e-service suite vendors, including out-of-the-box transcription to capture complete audit trails of Web collaboration sessions in customer history." IPhrase fell just slightly below KANA, earning a 3.95, followed by eGain and KnowledgeBase both with a 3.7, RightNow with a 3.5, and ServiceWare with a 3.3.

According to the evaluation, RightNow owns the market presence category with a 4.36, with its closest competitor in the section, KANA, trailing by more than a full point with a tally of 3.17. IPhrase earned a 3.06, KnowledgeBase a 3.03, eGain a 2.84, and ServiceWare a 2.56.

EGain took the top slot in the current offering section earning a 3.85, with KANA pulling in a 3.8, KnowledgeBase receiving a 3.6, ServiceWare amassing a 3.35, and RightNow with a 3.33. Even so, Ragsdale writes that the hosted vendor offers the fullest e-service available within a CRM suite. "RightNow expanded first to offer a full customer service suite, and as of late 2004 offers sales force and marketing automation tools as well. While its reliance on internally developed technology and its emphasis on CPG companies means their products are not the deepest functionally in some categories, RightNow offers good one-stop shopping for embedded customer service and e-service."

According to Ragsdale, CRM vendors Oracle, SAP, and Siebel Systems, are not far off from offering fairly sophisticated e-service suites, but "the newer areas of e-service differentiation such as dynamic generation of upsell/cross-sell messages, robust search technology, and tools for complex problem diagnosis, are not likely to roll up into the CRM vendor's view of e-service in the next two to five years. This gives niche specialists like InQuira, iPhrase, and Kaidara room to expand their customer base without competing with the likes of Siebel for e-service deals."