• April 18, 2007
  • By Coreen Bailor, (former) Associate Editor, CRM Magazine

CDC Software Nabs Saratoga Systems

With an eye on continuing its efforts of ramping up its industry-specific presence, CDC Corporation subsidiary CDC Software disclosed on Tuesday that it will acquire enterprise CRM vendor Saratoga Systems. While terms of the deal were not disclosed, the transaction is expected to be completed by the end of April and will be immediately accretive to CDC Software when completed. Upon closing, the soon-to-be acquired company, which has annual revenues of about $25 million, will become the Saratoga CRM division of CDC Software, according to Bruce McIntyre, formerly vice president of business development at CDC Software/Pivotal and now general manager of Saratoga. Saratoga provides marketing, sales, service and support, and analytics capabilities in addition to wireless CRM functionality through its Apresta division and partnership with BlackBerry. Saratoga CRM solutions are primarily targeted at large companies in a variety of industries including chemicals, consumer products, energy, insurance, manufacturing, and transportation; the company's client list features more than 350 customers including Allstate, Dresser-Rand, Konica Minolta, Tyco Healthcare, and Virgin Atlantic. CDC Software's Pivotal CRM apps, which have been the core of CDC Software's CRM portfolio since it acquired Pivotal in February 2004, are designed primarily for financial services, homebuilding, and additional manufacturing industries, and are mostly implemented by midmarket firms. "The purpose of looking at this was for us--in addition to the profitability--to try to get to a broader footprint in more verticals," McIntyre says. "We have a very defined vertical specialist strategy, and Saratoga has some good penetration into markets where we don't presently play with our current CRM products. So we see this as being complementary." CDC is planning to maintain Saratoga and Pivotal as discrete product lines, according to McIntyre. CDC Software's decision to grab Saratoga marks the company's latest vertical-specific move; most recently the company picked up Respond Group, a provider of enterprise feedback management software for the financial services sector, in February 2007. CDC Software says the Saratoga CRM apps are highly complementary to its acquired Respond applications and its Ross Enterprise solutions for chemical manufacturers. (CDC Corporation, then chinadotcom, acquired Ross Systems in August 2004.) Denis Pombriant, managing principal of Beagle Research, would like to understand where the emphasis will be, noting that the list of verticals that Saratoga plays in is very broad. He adds, though, that CDC Software's vertical strategy is smart. "Historically the biggest player in the vertical space was Siebel, and they had around 20 vertically focused business units with applications that were specific to their industries," he says. "As a practical matter, Siebel was in the early days of verticalization and no company could do a great job in all twenty. Some of Siebel's notable successes included automotive, pharmaceutical and medical devices, telco, and finance. But even in those cases, the applications were still first or second-generation versions--good for their time. But I think the general consensus was that even more work needed to be done. That's always going to be the case." Since Oracle's acquisition of Siebel, it seems Siebel has been a little quiet, and this might be a problem tied to the integration going on with Fusion, according to Pombriant, which he says was largely predicted. "There is room in the market for companies that are focused on specific verticals in CRM, especially if those companies can bring in very good functionality and continue to evolve the market-specific product." Related articles: CDC Gobbles Up MVI Technology
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