Microsoft Takes Over Parature

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Reportedly, the world’s largest software maker Microsoft Corp. (MSFT) has acquired customer service software firm, Parature for an undisclosed amount to strengthen its customer relationship management (CRM) product portfolio.

Based in Herndon, Va., Parature provides cloud-based software to help businesses efficiently manage customer service. It delivers support and social media engagement and management solutions to mid-sized and enterprise organizations. Parature’s new software, Parature Social Monitor, allows brands to aggregate customer comments and questions on social media sites such as Twitter and Facebook (FB).

Parature’s social customer service tools, including live chat, are becoming increasingly important due to the increasing shift from laptop and desktop computers to mobile devices, especially tablets.

The acquisition will help Microsoft’s Dynamics CRM software to compete more effectively against the likes of Salesforce.com (CRM) and Oracle Corp. (ORCL). Salesforce offers similar capabilities as the Parature tool kit. However, considering Microsoft Dynamics CRM is available at almost half the price of Salesforce, it could prove to be a highly competitive offering.

Currently, social media data has become a very important tool for companies to understand their target audience. Thus, Microsoft can tap the monitoring and data analysis requirements of the business communities by offering its CRM solutions.

Microsoft’s CRM software equips organizations with advanced cloud-based technologies that increase the efficiency of their operations, solve complex business challenges and improve resource allocation. It also facilitates communication and collaboration among the state and local government offices and reduces IT expenses of these organizations and their partners across the world.

The Microsoft Dynamics CRM team is quite active on the acquisition front. In Mar 2013, it acquired MarketingPilot, which provides marketing solutions that allow companies to better understand customer choices and accordingly design multi-channel marketing campaigns. In the same month, it acquired language analytics firm, Netbreeze, to further strengthen its CRM product portfolio.

Microsoft remains one of the best positioned software vendors, given its wide range of products, emerging markets strength, continued technology deployment at data centers and growth in cloud computing. In the last reported quarter, cloud services gained momentum, with commercial cloud revenues soaring 103% year over year. Office 365 and Azure grew in triple digits. Dynamics CRM also contributed to the strength in cloud revenue because two-thirds of customers moved to the cloud.

However, the popularity of smartphones and tablets from Apple (AAPL) and Google (GOOG) have been cannibalizing its core PC market. Microsoft is targeting Apple’s devices instead of Google’s because of the margins involved. This seems to be a good idea though of course, there is some risk involved.

Microsoft, currently, has a Zacks Rank #4 (Sell).

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