In a move deemed by industry pundits as right on par with company strategy, Indianapolis-based CRM software company Consona Corporation entered a definitive agreement to acquire the enterprise software-related assets of SupportSoft, a Redwood City, Calif.-based support automation solution provider, in an all-cash transaction valued at $20 million. The deal is expected to close in early June.
According to Tom Millay, Consona CRM's general manager, talks began in Winter 2008 with SupportSoft after the company had announced it was splitting its company into two pieces -- enterprise software group (ESG) and consumer group -- and was looking to sell off the former. "The company wanted to raise cash to invest in its consumer group so it planned on selling the enterprise business in order to do that," Millay says.
Millay is also quick to point out that SupportSoft's Intelligent Assistance Suite is complementary to the Consona CRM service and support offering, and the combination of the two will help his company delve deeper into its target markets -- including cable, telecom, and software companies; managed service providers; and large information technology (IT) helpdesks. The two companies currently share approximately 10 customers, according to information disclosed by Consona.
The plan is to immediately rebrand the ESG's offerings under the Consona name, and the products will be offered, maintained, sold, and supported both separately and part of Consona's Knowledge Driven Support solution. Each product line will have its own sales, product management, development, customer support, and professional services teams. That said, Millay could neither confirm nor deny any potential layoffs of SupportSoft ESG employees at this time. "At this time we'll be developing the operational and financial plan for the business going forward and addressing what that means for both the Consona and SupportSoft sides, [including] integration and staffing required," he says.
Acquiring the ESG side of the business as opposed to a strategic partnership makes good sense for Consona, argues Sheryl Kingstone, director of Yankee Group's enterprise research group. "If you're trying to make this part of your overall architecture, then in this day and age someone else could go buy them while you're partnering," she says.
Due to purchasing the assets outright, Millay says immediately rebranding is a switch from how it handled its past acquisitions of Knova and Onyx. "We looked and appeared in the marketplace as a collector of software products with minimal to no integration between the two, and that is the exact opposite of our strategy going forward," he says. "We're building a suite of products and integrating them at a deep level."
The deal should give Consona more breadth in the IT helpdesk vertical as well as telecommunications, Kingstone says. "It brings them into the communications space heavily, both [digital subscriber line] and cable operators," she adds. "This can launch them into that space because it gives them a customer base, and the vertical is trying to reinvent itself in customer service and support today. It's definitely something to keep an eye on."
Looking ahead, there is no definitive product roadmap for the marriage of Consona and SupportSoft's ESG business, and should not be expected until the deal officially closes. "I would expect we will have some level of integration to deliver to the marketplace within a year of the close," Millay predicts. "The major emphasis for us is that we're taking another step as a customer service-and-support focused vendor."
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