Pivotal Turns To Microsoft For Help

CRM software vendor reports falling sales and extends its marketing relationship with Microsoft.

Customer relationship management software maker Pivotal Corp. saw software license revenues nearly cut in half in the most recent quarter. And like sometime rival Siebel Systems Inc., which is also plagued by falling license revenues, Pivotal is turning to Microsoft Corp. to help boost sales.

Pivotal on Thursday announced that license revenues fell to $3.2 million in the Vancouver, British Columbia, companys fiscal 2003 first quarter, from $6.1 million in the same quarter last year. Total revenue for the quarter, which ended Sept. 30, was down to $12.3 million from $16.1 over the same period. The companys net loss for the three-month period dropped, though, to $8.8 million from $22.6 million last year.

To help spur revenue growth, Pivotal announced Thursday an extension of its relationship with Microsoft, of Redmond, Wash.,, including new demand generation initiatives for the healthcare and contact center markets. The companies will go to market together with combined solutions targeting mid-enterprise CRM (customer relationship management) in those verticals.

Pivotal also announced Thursday the completion of its acquisition of MarketFirst Software, first announced earlier this month. Pivotal issued 725,000 of its common shares for all the issued and outstanding shares of MarketFirst, valuing the deal at $348,000 based on Pivotals closing stock price Thursday.

MarketFirst founder and CTO Anurag Khemka joins Pivotal as vice president and general manager of marketing products. Pivotal also announced that Pivotal CTO Kirk Herrington has left the company to pursue other interests.

In other CRM earnings news Thursday, contact center software developer Aspect Communications Corp. postponed its earnings report after discovering billing errors related to some customer support contracts. The problem was first detected in the second quarter of this year, but found corrections still needed to be made in both the third quarter and prior quarters, company officials said. When Aspect does finally report earnings—the San Jose, Calif., company says it will happen "as soon as practical"—it is expected that revenues will be in the $95 million to 97 million range.

On the marketing side of CRM, Digital Impact Inc. showed a little life, reporting a revenue increase for its fiscal second quarter from $8.4 million to $11.1 million year-to-year. The San Mateo, Calif.-based provider of online direct marketing solutions, also cut its net loss from $6.6 million in last years third quarter to $1.2 million this year.

Personalization pioneer Net Perceptions Inc. saw total revenues in Q3 drop from $2.2 million last year to just $1.6 million this year. License revenues fell from $674,000 to $613,000. The Minneapolis-based company did succeed in cutting losses though, to just $626,000, down from $6.2 million in last years third quarter.