A Dot KANA Solution

KANA announced today that it would put it all on-demand with the launch of a fully integrated multi-channel software-as-a-service (SaaS) customer service suite. The release integrates KANA Response and KANA Response Live, which were released as on-demand products in 2005, with KANA IQ to create a fully rounded on-demand suite. The solution will include email, chat, call center, and Web self-service management capabilities. KANA hopes that the new on-demand offering will make it more attractive to companies in the midmarket, but it seems today that a live solution is merely a must-have for CRM software in order to stay competitive.

A recent report from Forrester Research found that at the end of 2006, 10 to 12 percent of the CRM market chose an on-demand model. This percentage is expected to climb to 25 percent by 2010. Marchai Bruchey, chief marketing officer at KANA, explains that SaaS has become more and more popular due to the changing face of the SMB. "Five years ago, SMBs or mid-tier customers were traditionally regional in nature," she says. "Today, with the Internet, SMBs can be global and have millions of customers." Often, although the breadth and number of SMB customers may grow, the IT resources and staffing restrictions stay the same. On-demand software that is easy and inexpensive to implement, therefore, becomes the most attractive option.

KANA OnDemand allows enterprise-wide data sharing capabilities, while enabling information integration across all service channels. KANA customers also have the options of switching seamlessly to an installed solution at any time. The company cites ease of integration and ease of use as the biggest differentiators for the on-demand option.

John Ragsdale, vice president of research at the Service & Support Professionals Association, says that this release is an intelligent move for KANA. Ragsdale says that as the mid-market continues to spend heavily in CRM and with KANA competitors such as RightNow having already found success in on-demand, "A product that makes sense for the mid market is the right thing to do." He says that with the release, KANA has increased its marketing efforts targeted at SMBs, and believes that this release has the possibility of putting KANA on the "short-list for midmarket companies."

Despite the attractiveness of an on-demand offering, Ragsdale says that it is the level of functionality, regardless of whether it is the SaaS or on-premise version, which should be the main selling point. As more companies release on-demand solutions, the software itself will become the differentiator. Ragsdale says the mantra for companies looking to implement a solution should be, "Pick the product first and then pick your deployment model."

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