Microsoft has agreed to buy Parature, which would add important customer care applications to the software maker's Dynamics customer relationship management product.
The acquisition announced Tuesday is the largest to date for the Dynamics CRM division. While Microsoft did not release financial details, the company paid $100 million for Parature, according to TechCrunch.
Meanwhile, Convergys said it will acquire Stream Global Services for $820 million.
Parature customers should get assurances that their existing contracts and contacts will continue for the next 12 months. Stream customers should contact their sales reps for updates on the Convergys transaction.
Dynamics's current customer care applications provide core features, such as case management, universal queuing and routing and light scheduling and field service, according to R "Ray" Wang, principal analyst for Constellation Research. Parature would add self-service features for customers, including knowledge-base software, live chat, mobile access and survey and feedback capabilities.
"Parature accelerates Microsoft's efforts in customer care by 24 months," Wang said.
Microsoft's strengths in CRM have traditionally stemmed from applications for managing sales forces and the tight integration its software has with Office. Over the last couple of years, Microsoft has expanded Dynamics CRM, which competes head-to-head with Salesforce.com, with features for managing marketing campaigns.
Parature's self-service knowledge-base functionality is the company's "crown jewel," Wang said in a news analysis. "This knowledge base was recently re-architected and is one of the most modern in the industry," he said.
Microsoft to buy Parature and beef up Dynamics CRM with self-service apps, such as live chat and knowledge base.
The danger in the acquisition is Microsoft hampering Parature's fast growth. In 2013, the company doubled its end user count to 70 million. Parature's major customers include Hitachi Data Systems, IBM, IGN Entertainment and NASA.
Microsoft will have to keep the talent behind the growth and maintain the same level of marketing and sales support. This could "prove to be challenging" in the midst of Microsoft's ongoing reorganization, Wang said.
In July, Chief Executive Steve Ballmer announced he was abandoning Microsoft's divisional structure into a single "One Microsoft" strategy that would focus much more on devices and cloud services. However, Dynamics, which Ballmer said represented a "significant opportunity," would remain independent.
Constellation advises Parature customers to make sure their existing contracts and the people they work with at the company will continue for the next 12 months. Dynamics CRM users should consider adding customer care features in the future.
Meanwhile, Convergys announced Tuesday that it would acquire Stream Global Services for $820 million in cash. The acquisition would create the second largest provider of outsourced customer management services. The combined company will have 125,000 employees in 135 call centers in 25 countries.
By swallowing Stream, Convergys extends its geographic footprint in the Americas, Europe, Asia-Pacific, Middle East and Africa, the company said. Stream's in-country language skills across Europe and Latin America are expected to help Convergys win deals among multinational companies in the U.S. and elsewhere.
The transaction is expected to close in the first quarter.