Nortel Networks is set to become a key player in the burgeoning customer relationship management (CRM) space, following its $2.1 billion acquisition of Clarify.
Clarify is jostling with Vantive for the number two slot in the CRM market, and recently announced plans to offer a hosted applications service.
Nortel hopes to leverage the combination of networking and CRM expertise to provide companies with complete customer profiles which can be accessed via telephone, fax, Internet, email and in person.
It believes this will help businesses to anticipate and respond to customer needs faster and develop more personalised service offerings.
"The top business imperative is developing ebusiness strategies that create lasting customer relationships," Nortel president William Connor said. "Together we will provide a new customer experience by unifying the high performance Internet with front office solutions and customer interactions of all kinds."
Managing consultant at telecoms consultancy Schema, Rob Pratten, said the move was a good one for Nortel.
"Nortel has a good reputation in public networks and IP networks, and one trend we're seeing is the convergence of ebusiness and public networks," Pratten said. "Clearly people are looking for solutions and this puts Nortel in a good position."
"It expands the product range they can deliver to customers," Yankee Group senior analyst Susen Sarkar said. "They're obviously looking to market other services together with the capabilities of Clarify."
In common with other ebusiness acquisitions, the value of the deal bears little relation to Clarify's small size and much more to the perceived growth potential of the sector.
Clarify has just 800 staff and recorded a turnover of $130.5 million for the financial year to December 1998.
The $2.1 billion price tag represents a 100 per cent premium on Clarify shares, which closed yesterday at $45, giving the company a market capitalisation of $1.05 billion.
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