There has been a tremendous amount of interest and attention focused on Web self-service recently. A number of
CIOs we talk to are making self-service projects a priority for the second half of 2004. Many others have ongoing pilots or are upgrading Web-based support and e-commerce sites with new search, content management and Web analytics. There has also been significant investor interest in this sector, with our self-service index outperforming the Nasdaq nearly 2-to-1 in 2003, the number of mergers and acquisitions nearly tripling in 2003, and financing activity (both IPOs and venture financing) picking up over the last six months.
We believe that automation and optimization of interactions with customers represents the next wave of CRM. These self-service and multi-channel e-service applications fill a definite functional and market need. More importantly, when deployed properly, they offer compelling benefits to both businesses and consumers.
Riding the self-service wave
So who will benefit the most from these trends? Certainly organizations that are able to lower interaction costs and better leverage investments in Web sites, CRM and enterprise search. And consumers who gain greater convenience and improved access to account or service information, and potentially get a more satisfying experience. But the big winners may be the self-service vendors who power this new software.
The self-service sector is large and fragmented. We track more than 150 vendors in the greater self-service space, including a number of traditional CRM, search and e-commerce vendors such as Kana and ATG, as well as approximately 20 to 25 "pure-play" Web self-service vendors.
As the self-service market consolidates, several leaders have emerged. Based on our scorecard methodology, which assesses a provider's brand, partners, technology, and delivery models, we have recently scored the vendors we cover and have created a "Top 5" ranking. (Note that our list only includes those vendors whose primary business is Web self-service and does not include Kana, eGain or the traditional CRM, search or e-commerce platform providers that also offer self-service solutions.)
Our top 5 Web self-service vendors
5. iPhrase Technologies Inc., Cambridge, Mass. -- Fueled by solid search and navigation technology and an aggressive sales force, iPhrase has built a sizable customer base and attracted several blue chip customers in financial services and retail, most recently Radio Shack. The company's focus has been hard-core self-service, but its purchase of Banter also gives the iPhrase some e-mail functionality as well as new CRM relationships.
4. EasyAsk Inc., Littleton, Mass. -- An early natural language processing pioneer, EasyAsk has become a strong player in the retail vertical and has recently expanded its focus to include customer service and support as well. A strong OEM business and an alliance with IBM give the company top marks in the partner category. This, along with excellent structured search, concept extraction and analytics, makes EasyAsk stand out.
3. Kanisa Inc., Cupertino, Calif. -- With one of the most sophisticated knowledge-base tools for customer support and self-service, Kanisa accelerated its rise with its acquisition of the Jeeves Solutions business from Ask Jeeves in 2003. Kanisa is best known for its high-tech clients such as Apple, Microsoft and Network Associates, but with the Jeeves deal, it is also gaining mindshare and business in other sectors. Strong technology, delivery and sales momentum put the company at number 3.
2. RightNow Technologies Inc., Bozeman, Mont. -- The one hosted provider in our top 5, RightNow has become the "Salesforce.com of customer support and self-service." While RightNow focuses on the mid-market, and is often dismissed by competitors as "low-end," no one can argue with the company's strategy, sales model, consistent growth and massive customer base. On the strength of its brand, marketing muscle and delivery model, the company edges out Kanisa for the number 2 spot.
1. Primus Knowledge Solutions Inc., Seattle -- One of the original knowledge management pioneers, Primus had a dramatic comeback in 2003, including the acquisitions of Broad Daylight and Amacis, several large new contract wins, and a return to profitability. With more than 225 enterprise customers, deep experience in the high-tech and telecom sectors, and increasing presence in other verticals and regions, Primus scores well across all four of our categories and had the highest overall score (but interestingly did not have the highest score in any one category). Despite a weaker than expected Q1, Primus is still the one to beat.
If you are planning a self-service initiative, these vendors all deserve to be on a short list. However, several other up-and-comers and incumbents from adjacent sectors are also worth considering. These include ATG with its new Adaptive Customer Assistance product and Verity with its recently acquired Native Minds product, as well as Inquira and retail banking specialist Mindfabric. As long as the sector stays hot, there are likely to be new entrants and additional companies repositioning to capture mind and market share.
Allen Bonde is the president of Allen Bonde Group, Inc. (ABG), a management consulting and strategic advisory firm with a focus on self-service trends, best practices and strategies based in Wellesley Hills, Mass. E-mail at: firstname.lastname@example.org