Witness Systems to Purchase Blue Pumpkin

In a play to be call center managers' one-stop shop for workforce optimization solutions, Witness Systems announced that it has reached an agreement to acquire Blue Pumpkin. The approximately $75 million deal is expected to be completed in the first quarter of 2005. For Blue Pumpkin customers using a recording vendor other than Witness, and for Witness customers using a workforce management vendor other than Blue Pumpkin, Witness will continue to support what it describes as "those point solution interfaces." According to Nancy Treaster, senior vice president of global marketing at Witness Systems, the company is, however, looking to "transform a fragmented market into a real seamless set of functions that work together and make contact centers more efficient and more effective than they are today with their point solutions." Witness is looking to combine its performance optimization solutions with Blue Pumpkin's workforce management solutions to gain a stronghold on the workforce optimization market. Workforce optimization, according to Treaster, comprises four components that most industry analysts define as quality monitoring, workforce management, e-learning, and analytics. But, "it either stems from the workforce management side and goes up through e-learning and analytics, or it seems to be stemming from the quality monitoring side and doing the same," Treaster says. "What we hope to do with the acquisition of Blue Pumpkin is really transform the concept of workforce optimization from [an] array of point solutions into a truly tightly woven workforce optimization solution or systems of functions." Treaster expects this single supplier approach to appeal to the midmarket. "[Blue Pumpkin] will give us a nice lead or at least momentum to make inroads into the midmarket, which is showing some signs of being ready to take on quality monitoring and e-learning technologies," she says. "[The midmarket] tends to be less likely or interested in buying point solutions and more interested in having a suite where they can buy from one vendor [and] have...a lower total cost of ownership. Putting these two companies together is going to be a huge advantage for making some progress in that space." Seema Lall, industry analyst for Frost & Sullivan, contends that there is an advantage to offering a solution with both workforce management and quality monitoring, but stresses the importance of Witness' ability to integrate the solutions. "It's going to essentially depend on how well Witness can integrate these two products and what additional value is realized by the combined solution." According to Paul Stockford, chief analyst of Saddletree Research, the acquisition won't have much of an effect on the market due to the integration process that will have to happen between the two companies over the next 60 to 90 days. Witness will, after that time, have the most comprehensive workforce optimization offering on the market: "Now they've got the pieces in place: monitoring, e-learning, performance management, and now they've got workforce management. Once the integration is done...it will be sort of a kick in the pants to the other vendors to come up with some sort of competing strategy. Whether it's through acquisition, partnerships, [or] alliances, the other companies out there are going to have to make some decisive moves toward having a more complete workforce optimization story in order to stay competitive." Related articles: Market Watch: Making Sense of Workforce Optimization Merging Performance Optimization With Workforce Management Call Centers Splurge on Workforce Optimization