Kana Comes Home

In August 2005 Web self-service specialist KANA Software announced that Michael Fields, acting president and CEO, would take over for departing CEO Chuck Bay. Almost a year since his appointment, Fields, whose 30-plus years in enterprise software company management include a stint as president of Oracle U.S.A., is making strides toward rebuilding KANA's credibility by reworking its internal structure. KANA, a two-time leader in CRM magazine's Service Leaders Awards, fell off the list in the 2006 awards issue, with some experts questioning the company's vision despite its functionally strong offerings. The vision seems to be clearing: In April 2006 the company announced preliminary results for Q1 2006, showing a third consecutive quarter of license revenue growth. License revenue shot up 80 to 95 percent year over year, exceeding analysts' expectations by as much as 50 percent. KANA is launching local and worldwide user groups to address functionality. It's also doubling its sales force in North America and plans to do so in Europe in the second half of 2006. But perhaps the company's most intriguing initiative was its decision to bring its outsourced engineers back in-house and to consolidate R&D operations. "We had outsourced the core product development to another company offshore," Fields says. "You can't give up your [intellectual property] development." A review of cost and time-to-market showed KANA wasn't saving much of either. Without collaboration between architects and programmers, much of the work needed redoing. KANA plans to have all outsourced engineers back in-house by midyear. "Mike Fields returned [credibility] to KANA...he said they're going to do [something] and they do it," says Esteban Kolsky, a research director at Gartner. "He set a plan in place and [took] steps to return KANA to where it should be."

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