News Analysis: Microsoft Dynamics CRM Acquires Parature For Customer Service Capabilities
Dynamics CRM Gains Key Technology and Team To Take Existing Customer Care Assets To Next Level
On January 7th, 2014, The Microsoft Dynamics CRM team announced a definitive agreement to acquire Herndon, VA based Parature for an undisclosed sum. This acquisition is Microsoft Dynamic's CRM's largest to date. Parature is an East Coast software start-up success story founded in 2000 by five Cornell students including Duke Chung. Originally named Cyracle Technologies, the company's first product addressed the live chat market. Current CEO, Ching-Ho Fung, the first angel behind Blackboard, provided the initial angel investment in 2001. Parature's key investors include Valhalla Partners, Sierra Ventures, and Accel Partners. The acquisition is significant for both Parature and Microsoft Dynamics Customers because:
- Parature fills in a key gap in the Microsoft Dynamics CRM offering. Microsoft CRM currently has a customer care offering that delivers core customer service with case management, universal queuing and routing, and light scheduling and field service. Parature provides key self-service knowledge base software, core customer service, live chat, mobile access, survey and feedback capabilities, social monitoring, and Facebook portal capabilities to the Microsoft service offering.
Point of View (POV): Microsoft's core strengths have come from the sales automation product and the tight integration with Office. Since 2012, with the arrival of Corporate Vice President, Bob Stutz, the Dynamics CRM team has sought to round out the rest of the customer experience offering. (Note: Bob Stutz was a key force in the development of Siebel CRM and SAP CRM.) The acquisition of Marketing Pilot provided a key building block for marketing automation. This acquisition of Parature adds to General Manager Jujhar Singh's investments in customer care. Dynamics CRM customers gain the knowledge base functionality in Parature, which is the crown jewel. This knowledge base was recently rearchitected and one of the most modern in the industry. Parature customers will gain greater investment in the customer service and support product line with deeper integrations to a full customer experience suite.
- Parature adds 70 million end users to the Microsoft Dynamics CRM ecosystem. The company has built a strong foothold in key industries such as education, gaming, high-tech, non-profit associations, online media, public sector, and travel. Major brands include Ask.com, Asure Software, ATRA, Brenau University, BuilderMT, CompTIA, e-MDs, EPA, Florida Atlantic University, Hitachi Data Systems, IBM, IGN Entertainment, iWin, NASA SEWP, PlayFirst, SoftChalk, Threadless, Top Down Systems, TMA Resources, and Travel Lodge UK.
(POV): Parature's relentless focus on customer success has led to tremendous growth. In 2013, Parature doubled its end user count from 35 million in 2011 to 70 million. Microsoft's team will
need to retain key Parature talent and augment them to continue this level of momentum. More importantly, Microsoft will need to maintain the same level of marketing and sales support if it hopes to maintain the same growth trajectory. This may prove to be challenging given the current One Microsoft reorganization in progress.
The Bottom Line: Microsoft Dynamics CRM Shows Its Seriousness About Customer Experience
Dynamics CRM is the fastest growing part of the Microsoft Dynamics franchise. In head to head deals, the Dynamics CRM unit is giving Salesforce.com the most competition. The acquisition of Parature shows that Microsoft is willing to make strategic bets to accelerate time to market of key offerings such as customer care. Parature accelerates Microsoft's efforts in customer care by 24 months. The additional talent and customer base will provide both Parature and Microsoft Dynamics CRM customers with a win-win.
As with any major acquisition, Parature customers should make sure that existing contracts and key personnel continue into the next 12 months. Microsoft Dynamics CRM customers should consider the new customer care offerings in future investment plans. Meanwhile, Dynamics CRM partners should get to know the Parature product lines as soon as possible in order to increase cross-sell opportunities.
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