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Sales performance software market shrinks as Xactly buys Centive

Barney Beal

Sales performance management software vendor Xactly Corp. yesterday purchased the assets and the employee base of its competitor Lowell, Mass.-based Centive in an all stock deal.

The combined entity will operate as Xactly with headquarters in San Jose, Calif.

Sales performance management software tracks, reports and administers sales performance across a company.

Both companies operate as purely on-demand, multi-tenant Software as a Service (SaaS) sales performance management applications and are offered on Salesforce.com's AppExchange platform. Initial discussions on the merger began more than a year ago, according to Christopher Cabrera, president and CEO of Xactly.

"In the SaaS space, size matters in terms of scale," he said. "We basically compete in every deal with each other and primarily lose to each other. It was pretty natural we started to investigate the two companies coming together."

Xactly will support both platforms separately for a minimum of 18 months as it transitions to a unified product. Most of the development work will focus on bringing the two applications together, Cabrera said. Xactly is built on an Oracle foundation and Centive on SQL, but was beginning to move toward Oracle itself. Engineers from both companies have already begun discussing plans.

"It will probably be a month long process," Cabrera said. "Within six to five weeks we'll go to our customers and say what unified strategy looks like and offer

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timeframes. We have both made commitments to existing customers that we intend to keep to the extent we need to do upgrades or make enhancements."

Prospective customers will not be steered toward one product or the other, according to Cabrera, though the acquisition has taken the uncertainty out of many of their decision.

The combined entity will have more than 200 customers split roughly evenly between the two products, Cabrera said.


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