Despite tremors on Wall Street, a tiny Canadian software developer takes giant steps with an acquisition that doubles the company's size
Posted Jul 5, 2002
Knexa.com Enterprises, a tiny knowledge-management software developer in Vancouver, British Columbia, serving the healthcare industry, is betting its future on an acquisition. In a stock swap valued at 1.8 million Canadian dollars, Knexa.com announced this week that it bought SuiteResponse Customer and Citizen Service (CSS), a business unit of EVER America, a content-management vendor, earlier this week.
The acquisition, which is still subject to shareholder and regulatory approval, brings Knexa.com's headcount to 21 employees and opens doors to government and utilities markets, as well as customers in Asia-Pacific. At the core of the deal is EVER America's flagship SuiteResponse software, a suite of knowledge-management applications. "It can be described as a sort of CRM for government," says Knexa.com CEO David Brett. The technology runs on IBM software and hardware.
SuiteResponse CSS has 28 customers, such as Enbridge Consumer Gas, City of Berkeley California and City of Toulouse France; the acquisition is expected to buoy Knexa.com's sales. Knexa.com claims SuiteResponse CSS's revenues have grown steadily, from $710,000 in 1999 to $1.524 million last year. And revenues are expected to grow 30 percent this year, en route to turning a profit. SuiteReponse CSS is also one of IBM's top public sector partners.
But before the acquisition pays off, Knexa.com must meld its technology with SuiteResponse. Knexa.com's gem is an incentive engine that can be built into CRM and ERM systems.
Here's how it worked for Areopa, a consultancy and Knexa.com customer. The company hired a consultant who had a PowerPoint presentation for consulting engagements, and thus Areopa asked him to share this knowledge. The new consultant posted the document in a central repository, and received 'contingency' points. Knexa.com's incentive engine tracked the document and recorded reviews from Aeropa's consultants. Both reviewers and the new consultant then received 'active' points based on the quality of the reviews.
"It's more than hits on a document," says Brett. "You also can't just be a prolific author spamming the system with documents -- that will just get you contingency points, not active points. You have to get feedback."
Knexa.com developers are working on tying the incentive engine into ERP systems, so that sales stemming from particular documents will be reflected in active points awarded to the author. Ultimately, the incentive engine creates a scorecard that could be linked to performance reviews, bonuses and even trips to Tahiti. "With this incentive engine, we're trying to overcome the knowledge-hoarding problem and cultural resistance to adopting new technology, such as CRM," Brett says.
Sharing knowledge has been a moving target for many companies. So why would EVER America sell off key technology? In these uncertain times, it's difficult to move in many directions, says Graeme Somerville, vice president of marketing at EVER America. (Somerville expects to hold a similar role at Knexa.com after the acquisition is completed.) "Many technology companies are focusing on their core competencies," he says. "[Parent company] EVER Team in France came from the document-content-management world, and that's what they're focusing on going forward."
Apparently, Knexa.com is the exception to a general retrenchment in the tech sector. "Timing is a funny thing," says Brett. "The markets, particularly in the last few days, have been in a meltdown." But the difficult economic conditions sometimes forces smaller companies to move forward "and try new things," Brett says. "We can take advantage of this hunkering-down phenomenon."
Increased awareness on homeland security should also bode well for tech companies positioned in the government vertical, says Somerville. "There will be a revisiting of emergency procedures, documentation, development of new content," he says. "This involves large communities of interest both inside and outside the organization... and you want to make sure everybody is reading information and contributing to it."
Tom Kaneshige also writes for Line56.com
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