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Salesforce.com acquires InStranet, adds knowledge management to CRM suite

Barney Beal

Salesforce.com today acquired InStranet, a knowledge management software firm, for $31 million.

Chicago-based InStranet was founded by former Business Objects executives and uses technology it calls dimensions to categorize customer and

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corporate data to deliver information. For example, it can take into account that a telecommunications customer has a wireless account but not cable television service when it serves up answers to a question about "poor signal," according to Salesforce.com. The approach contrasts with traditional keyword search methods that have fallen short of expectations for years.

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"The problem they addressed in the market is helping customers find answers to their questions," Falcione said. "Search just doesn't work well for customer support today."

While InStranet will initially be integrated with Service and Support and the Customer Portal, it will eventually be extended to the rest of the application suite -- helping salespeople find answers to common questions resident within the system, for example.

InStranet represents the largest acquisition Salesforce.com has made to date, overshadowing Kieden, a company that integrated Google AdWords with Salesforce.com to maximize keyword advertising; Sendia, a mobile technology firm; and Koral, a document management firm. Both Koral and Kieden were part of Salesforce.com's AppExchange. InStranet added its knowledge management application to the AppExchange in 2005.

InStranet is focused primarily on the business-to-consumer market and has about 50 customers with more than 350,000 contact center agents around the world. Customers include Comcast, Orange and FedEx.

"With knowledge management, Salesforce.com's technology is not only enhancing the experience of the customers -- because they get the answers they came for -- but also enhancing the agent experience," Natalie Petouhoff, senior analyst with Cambridge, Mass.-based Forrester Research, wrote in an email. "That's because the agents can quickly, easily and consistently find what they need to serve the customer. Then there's self-service -- whether it's agent-assisted self-service or plain old self-service, without knowledge management as a strong capability just doesn't make sense. "

InStranet will be generally available on Saleforce.com's Force.com platform in 2009. Pricing has not been announced, but the product will be charged on a per-user, per-month fee.

Salesforce.com will continue to support InStranet's existing customers.

"We're absolutely committed to customer success and will continue to support whatever portal or call center technology they're using [to] make sure they're successful," Falcione said. "Our hope is they will move to Salesforce.com."


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