In a wide-ranging alliance, Nortel Networks and Broadbase Software Inc. will jointly develop and market a product they say will provide end-to-end customer relationship management.
The communications company and the CRM vendor plan to release Nortel Clarify Analytic Applications by January. The tool will be integrated with Nortel Networks Clarify eFrontOffice solutions, a product used to handle customer service across telemarketing, direct sales and Internet channels.
CRM spending by U.S. companies is projected to reach $3 billion this year, according to industry research firm Datamonitor.
No. 1 challenge
The deal means marketers will be able to create queries of customer behavior and receive quick results, said Dave Handley, manager of support systems for Rockwell Automation, which already uses Nortel and Broadbase CRM software. Rockwell’s No. 1 challenge is to develop custom reports for business managers, Handley said.
“I anticipate a lot of `wows’ throughout Rockwell Automation,” Handley said. “As soon as we deliver a report, someone wants something new. A call center in Italy wants to see their data, but doesn’t particularly care about England, France or Germany. This will give us a way to filter that information more quickly.”
For Nortel, the Broadvision deal furthers its strategy of selling corporations on the value of applications that manage all points of contact with a customer along with traditional business phone service. Nortel has spent more than $100 million in marketing dollars to position itself as an e-commerce solutions provider and is racing against IBM Corp., Cisco Systems Inc., Lucent Technologies Inc. and others.
“Telephony products automatically integrated into the front-office suite keep you from having to do the integration work yourself,” said Peggy Menconi, research director at AMR Research Inc.
But Erin Kinikin, vice president of CRM for Giga Information Group, said the deal would ignite the debate of whether CRM software should be included with “telecommunications plumbing.”
Today, many companies choose to purchase CRM solutions separately from telephone services and telecommunications hardware, Kinikin said. If Nortel, IBM, Cisco or Lucent are successful in melding telephony and CRM, it could give specialists such as Siebel Systems Inc., Quintus Corp., Aspect Communications and Genesys Telecommunications Laboratories Inc. a run for their money, she said.
“The overall cost of a high-end CRM system is three to five times the cost of the software because of all the time it takes to connect business systems,” Kinikin said. “Nortel promises a one-stop shop with pre-integrated software and a lower cost of implementation.”
Sheldon Davis, chief technologist for the Nortel Networks e-business applications unit, said the Broadbase deal moves it one step closer to delivering “return on relationship” systems that will close the loop among telephone direct sales and Internet transactions. When that happens, marketers will be able to measure the dollar-for-dollar efficacy of marketing and advertising efforts, he predicted.
“The business telephone of the future is a CRM portal,” Davis said.
For Broadbase, whose average sale is between $300,000 and $500,000, the Nortel agreement gives it the marketing clout of a giant with more than $20 billion in annual revenue. Already, many of Broadbase’s more than 250 customers use some form of Nortel services, said Andy Kieffer, director of worldwide channels for Broadbase. The alliance, he said, calls for the two companies’ development teams to work closely to integrate the best of each other’s software code.
John Evan Frook is a reporter with RCR Wireless News sister publication Crain’s B-2-B.
