Microsoft Dynamics CRM Strengthens Offerings With Parature Acquisition

Microsoft Dynamics CRM is adding Parature's customer service capabilities to its arsenal, entering into a definitive agreement with Parature to acquire the 13-year-old, privately held company.

Parature provides cloud-based customer service to midmarket and enterprise companies. Its product features include an extendable knowledge base, mobile customer care, social customer support, and chat for customer service and sales.

The Parature acquisition "is helping us complete our capability set for driving customer self-service solutions," explains Bill Patterson, Microsoft's senior director of planning and strategy. Adding Parature's capabilities to Microsoft Dynamics will "[help] us strengthen our multichannel engagement strategy," he says, while also adding strong offerings in knowledge management and social and mobile integration.

The acquisition follows other recent additions to Microsoft Dynamics, including the purchases of marketing automation company MarketingPilot in 2012 and social analytics vendor Netbreeze in 2013. Ray Wang, founder and principal analyst at Constellation Research, sees this latest acquisition as a strategic decision made by a Microsoft leadership team that has focused on building, partnering, or acquiring what they need to strengthen Microsoft Dynamics CRM.

"This sets them up to go head to head with Salesforce.com," Wang says. "They're getting the really advanced, modern knowledge base. You can easily take a case to Microsoft Dynamics, but you don't have the social capabilities, and what they're able to do with Facebook." By acquiring Parature, Microsoft is choosing to buy instead of build, which "helps them accelerate the process" of having a more complete CRM offering, Wang adds.

The acquisition will move Parature's 70 million end users from more than 500 brands under the purview of Microsoft Dynamics. Parature has "great federal customers and technology customers," Wang notes, and it doubled its client base over the past two years. Customers includes the United States Environmental Protection Agency, IBM, Saba Software, Tagged, and the retailer Threadless. Some were already using both products, especially since the two companies had developed a close partnership that helped optimize the experience for companies using both. Parature will still be available separately for customers who do not want to switch CRM systems, according to Patterson.

Parature CMO Duke Chung promised to continue the company's growth and innovation within the Microsoft fold. "We're going to continue to innovate in this space, and bring all the innovations in all channels in customer care to augment the capabilities of Microsoft Dynamics...in place today from the customer care perspective," Chung says.

Parature is built on the Microsoft Stack. That similarity, along with the pre-acquisition partnership between the companies, should help make for a smoother technical transition. Customers will learn more details about how the acquisition will affect them at the two companies' respective conferences, Parafest in February for Parature and Convergence 2014 for Microsoft in March.

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