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Microsoft Acquires Parature for Self-Service CRM

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Posted January 7, 2014 By Pedro Hernandez     Feedback

Parature's cloud-based customer service software will enable Microsoft Dynamics CRM users to help millions of consumers help themselves.

Microsoft has acquired Parature, a Herndon, Va.-based customer service software specialist, the software behemoth announced Jan. 6. Sources close to the deal told TechCrunch that the transaction is valued at $100 million.

Parature's cloud-based software platform enables businesses to deliver customer-facing self-service capabilities. Capabilities include social customer support, support ticketing and mobile customer care, among others.

For Microsoft, it's a match for its own customer relationship management (CRM) offerings. "These capabilities complement the existing Microsoft Dynamics CRM customer-care solution with core strengths in workflow, extensibility and process-driven user experiences that allow contact center agents to do their best work," said Microsoft in a statement.

It's a view shared by R "Ray" Wang, founder and principal analyst of Constellation Research. In a research note sent to eWEEK, Wang observed that currently Dynamics CRM "delivers core customer service with case management, universal queuing and routing, and light scheduling and field service."

Parature's cloud platform "fills in a key gap," said Wang, by providing "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."

Moreover, Microsoft Dynamics CRM customers gain Parature's "crown jewel," namely the platform's knowledge base functionality. "This knowledge base was recently rearchitected and one of the most modern in the industry," informed Wang.

Parature targets midsized and large businesses. Its customer roster of 500 brands includes Ask.com IBM and the U.S. Environmental Protection Agency. The company has provided customer service to 70 million users, claimed Microsoft.

Bob Stutz, corporate vice president of Microsoft Dynamics CRM, said Parature's technology aligns with a marketplace that is driven by mobile, tech-savvy consumers. "Organizations are looking for business solutions that can strengthen their ability to connect with customers on their own terms, using whatever device and whatever channel they prefer," he said in company remarks.

Describing Parature as a "perfect fit for every business," Stutz predicted that the buy will enable Microsoft to offer "one of the best cloud-based solutions for customer self-service."

"This is a compelling combination for organizations committed to delivering the best service experience that consistently exceeds their customers' expectations," he added.

The deal exemplifies Microsoft Dynamics CRM's "seriousness about customer experience," concluded Wang. "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," he said.

"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," added Wang. Yet, challenges remain.

Wang said that for the deal to pay off, Microsoft needs to "retain key Parature talent and augment them" to keep Parature's momentum going—Parature's user count rose from 35 million in 2011 to the 70 million today—and "maintain the same level of marketing and sales support." He said such efforts may prove challenging given that the company is in the midst of its sweeping One Microsoft reorganization.

In recent years, Microsoft has shown a willingness to dip into its coffers to grow Dynamics CRM and fend off competitors such as industry darling Salesforce.com.

In Oct. 2012, Microsoft acquired MarketingPilot, a maker of integrated marketing applications. On March 19, during the Microsoft Dynamics Convergence 2013 conference in New Orleans, the company announced that it had snapped up NetBreeze, a social analytics application provider.

Originally published on eWeek.

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