E.piphany: Shopping for Dominance
The deal sounds expensive and dilutive. Then again, paying top-dollar for acquisitions has been a smart strategy for such companies as Cisco. However, the acquisitions must be for companies that substantially contribute to a company's leadership.
E.piphany is in a fast-growing field known as customer relationship management (CRM). CRM is critical for the success of companies that want to sell more products (and what company does not?). E.piphany's technology -- known as E.4 -- basically analyzes customer behavior and then generates strategies to super-charge sales. E.4 does such whiz-bang things as data warehousing, data mining, campaign management, and real-time personalization.
On the face of it, Octane Software is a small company. In 1999, the company had a mere $3 million in revenues. Although, this year the company is expected to generate $35 million. While E.piphany analyzes customer patterns, Octane builds technology that allows for better communications within a company. Octane's technology is called Octane 2000. It is a Web-based application that manages real-time interactions between customers, partners, suppliers and employees over a myriad of touchpoints, like e-mail, the Web, chat, fax and phone. Octane 2000's is built using open standards and thus integrates seamlessly within enterprise environments.
Octane Software's technology has also been used in a variety of business-to-business marketplaces (such as Buzzsaw.com, which is the hub of the construction industry).
With the combination of E.piphany and Octane Software, there will be close to 130 customers. They include: American Express, Critical Path, GTE, Charles Schwab, and even Amazon.com.
With its powerful technology and customer base, Octane Software was a sure bet for an IPO. But by combining with E.piphany, both companies will benefit -- offering customers a full-suite of services and ultimately enhancing the overall value of E.piphany.
