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January 5, 2004

Kana to acquire Hipbone

Kana Inc, a service-centric CRM supplier viewed as a potential acquisition target in the current consolidating market, plans to make an acquisition of its own and has signed a definitive agreement to acquire Hipbone Inc.

By CBR Staff Writer

San Carlos, California-based Hipbone provides on-line customer interaction solutions. Its core offering is the Synetry interaction platform that enables live collaboration between an organization and its customers through facilities such as co-browsing, text chat and call-back capabilities. It is aimed at improving the quality of support and customers’ experiences during online interactions.

Hipbone’s main market has been sales executives within banks, brokerage services and other financial institutions. Unlike other web collaboration or co-browsing solutions that are based on URL-pushing, Hipbone’s Java-based proxy-server architecture provides web navigation without requiring customers to make changes to their web sites.

Financial details were not disclosed but the agreement is expected to close in the first quarter of 2004. Privately held, venture-backed Hipbone has good connections with companies such as Oracle, Chordiant and Talisma utilizing its technology, plus blue chip customers like Wells Fargo. It was founded in 1998, and its last round of funding came in January 2003 from Trans Cosmos USA. The investment followed the December 2002 appointment of Trans Cosmos’s parent company, Tokyo-based Trans Cosmos Inc as the initial reseller of Hipbone products in Asia.

The addition of Hipbone technology will increase the number and type of interaction channels supported by Kana’s iCARE suite through the addition of web-based collaboration, and the company said it completes its multi-channel solution in terms of supported channels. The ability to provide live, online assistance at critical times is designed to make the customer/agent interaction closer to that of an in-store, in-person encounter. Kana takes what it describes as a knowledge-powered approach to managing customer relationships, combining analytics with thin-client web architecture to deliver high quality customer interactions.

Kana plans to combine Hipbone technology with its iCARE solution but it will continue to offer Hipbone as a stand-alone product and will also integrate the web-collaboration solution into Kana Response, Kana Contact Center and Kana IQ. It also plans to integrate Hipbone products into its vertical market product lines.

In addition to providing increased functionality, a process that will be eased because both Kana’s and Hipbone’s software are Java-based, Kana will be hoping for improved access to vertical markets given Hipbone’s concentration on the financial services, insurance, high-tech and travel sectors.

Kana has previously flirted with the provision of a broad-based CRM suite offering full sales, service and marketing capability, but failed to make an impression. Last year it reverted to its original strategy of providing service-centric solutions based on both agent and self-service solutions, which merge knowledge management with traditional CRM service functionality to extend the scope of service activity outside the organization and notably, enable proactive service functionality.

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It is hoping its specialist, in-depth service capability will enable it to survive in the rapidly consolidating market, and the proposed Hipbone acquisition is designed to support that strategy.

This article is based on material originally produced by ComputerWire.

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