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Microsoft Just Put These 3 Companies Out Of Business

Jan 13 2014, 9:11am CST | by

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Microsoft Just Put These 3 Companies Out Of Business
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Microsoft Just Put These 3 Companies Out Of Business

Zendesk . Autotask . Freshdesk . These are three great little companies that make three excellent help desk/customer service management applications. But they, like others in this niche, could be in trouble. OK, I’m probably exaggerating when I say that Microsoft is going to put them out of business . But at the very least, they’re about to face a huge competitive challenge. That’s because this past week Microsoft announced the purchase of Parature, another help desk/customer service management application. And the effects will be significant.

My company is a Microsoft partner. We sell Dynamics CRM. And, with all due respect to Zendesk, Autotask and Freshdesk, we couldn’t be happier by this news. Service management has always been a critical, yet under-served part of good customer relationship management. Now it’s getting the attention it deserves.

I’m picking on web based management applications like Zendesk, Autotask and Freshdesk because I’ve known and respected them for years. All three companies offer excellent tools that can help you provide quicker, better and faster customer service to your customers. Using these applications, you (or your customers or an internal employee) can create tickets (or cases) whenever there’s a service problem. The ticket can be attached to an asset or product that’s causing the problem. It’s routed to the right person for resolution. There are knowledge-bases where answers can be documented for quick retrieval and future research by both internal customer service agents and customers themselves. Tickets can be created from mobile devices, via email or through web-based self-service portals. Histories are stored in databases to track those customers, assets and products that are giving you the most headaches. These applications, and many others like them, offer great reporting tools, dashboards and advanced workflows to automate your service processes. They integrate with phone systems and your website and e-mail services. They provide alerts to warn you of potential issues based on prior problems and upcoming deadlines. They offer live chat, customer feedback, social monitoring and engagement tools. They’re extremely customizable and offer developer tools too. These are all great products. And essential too.

Smart business managers know this. They realize the importance of having a strong help/service management system in their companies. They’ve calculated the cost of acquiring new customers vs. the overwhelming benefits of keeping their own customers happy and willing to buy more. They understand the value of an internal help desk system for resolving computer, maintenance, human resources and accounting issues and how these systems help their employees maximize their productivity. Companies like Zendesk, Autotask and Freshdesk have smartly taken advantage of this trend and over the past few years have offered excellent cloud based applications to address these needs.

And Microsoft has noticed. Uh-oh.

Microsoft last week reportedly spent $100 million to purchase Parature. Not a huge sum for a company their size. But it’s no piddling amount either. Parature is a respected provider of help and service management tools like Zendesk, Autotask and Freshdesk. And like and other customer relationship management leaders, Microsoft plans to integrate the acquisition into its own Dynamics CRM application, which will bolster the product’s service management capabilities. This is trouble for their smaller competition.

CRM applications have in the past focused mainly on sales and marketing. They were born from the sales force automation industry which itself came from contact management software. CRM applications seem to always focus on things like “pipeline management”, “opportunity tracking” and “marketing automation.” Yes, these are important. But what about customer service? Shouldn’t salespeople know if there’s an open service issue before calling on that customer? Shouldn’t senior management be able to see both sales and service activities about a customer all in one place? Isn’t good customer service the responsibility of both the service and sales departments? Sure, most good CRM applications, like Dynamics CRM and, come with service and help desk management capabilities. But they were always the forgotten step-child – weak and often ignored by my own customers in lieu of better products that specialized in this sort of thing like Zendesk, Autotask and Freshdesk. Now that’s changed.

“With Parature, we’ll integrate multiple channels, such as social, email, Web-based chat, and Web self-service,” explained Bill Patterson, Microsoft’s senior director of planning and strategy, in a phone interview with InformationWeek. With this missing piece, they will be able to offer an out-of-the-box customer service application, as part of its CRM product, that will rival most in the industry.

Parature has been integrated with Dynamics CRM since 2009. But it was a third party product, not supported by Microsoft and it cost extra. With this acquisition, the product will now fully be under the Microsoft umbrella. It will be part of the application’s core features. Microsoft is finally saying that customer service is every bit as important to CRM as sales and marketing is.  It’s an important step for the product. It’s an important step for Microsoft. As for their competitors, well…

Besides Forbes, Gene Marks writes daily for The New York Times and weekly for .

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