Acquisition of the Week: RightNow and Salesnet

RightNow has announced its intention to acquire Salesnet for its workflow automation capabilities and, in a surprising show of honesty, its customer base in all all-cash merger of the two companies. When last we looked at RightNow, it compared well to competitors in reporting and core functionality. But in terms of standardizing sales practices and supporting larger environments, RightNow fell behind market leaders such as salesforce.com and Salesnet.

Standardization of sales practices across an organization is one way of improving productivity of your sales force. But without a strong workflow component, it's nearly impossible to enforce best practices or organizational standards in a hosted environment. Salesnet, however, has always focused on just that aspect of selling - best practices and standardization. But RightNow brings to the table more advanced analytics and campaign management, which will surely benefit existing Salesnet customers.

RightNow indicates that the acquisition will accelerate its roadmap and that integration between Salesnet and RightNow applications will be initially completed this summer, but is not expected to be wholly complete until the summer of 2007.

RightNow CRM has always been a .NET focused solution and Salesnet's love affair with Microsoft technology has been similarly obvious over the years, so they share at least a common technological ground from which to begin integrating features and functionality.

The announcement is unsurprisingly light on details of future product direction, but states states, "The acquisition will accelerate RightNow???s customer experience management development efforts by combining RightNow???s patented knowledge foundation with Salesnet???s sophisticated workflow engine."Hmmm... It certainly sounds like Salesnet's offering will be subsumed by RightNow's offering and disappear into the nether-regions of history, with only its "sophisticated workflow engine" surviving the merger.

What does it mean?We're sure that if Marc Benioff were to "leak" an internal memo regarding this acquisition that he'd say something about the acquisition being proof that his competitors, unable to dent the mountain that is Salesforce, were now ganging up on him. That would be followed closely by a reminder that it isn't about the software, it's about the service. And he'd close by encouraging his people to aggressively court Salesnet's newly disillusioned customer-base. Or something like that. We're certain we'd be amused, that's for sure.

If you're an existing customer of Salesnet it means an eventually migration to the RightNow product-line. RightNow says it intends to "support Salesnet???s existing customers and provide a seamless upgrade path." (Is it really an "upgrade path" or a migration, guys? Seems like the latter to me.) That will mean better forecasting and analytics, but will likely mean customers will need to get familiar with the RightNow way of doing things.

If you're a RightNow customer, it means another year before you'll really be able to really take advantage of Salesnet's technology, though you'll likely start to see benefits from at least a minimal integration this fall.