Even the most casual observer of the IPO market will notice that something is missing from the recent flurry of deals hitting Wall Street. With a few exceptions, the days of the consumer-driven "e-tailer" are over.
There was a time when all a company had to do was throw a "dot com" behind its name, and wait for investors to come calling. Companies peddling such things as books, flowers, food, art supplies, hardware and computers all found a little patch of ground in cyberspace. And when these companies went public, most reaped great rewards.
That's not to mention the gains being made in the financial and communications industries, which see the Internet economy as a fertile field for growing wealth. New customers, new transactions, a new way of doing business. And a new way of cashing in.
As established companies began to implement the new technologies into all of its business practices, everything from dealing with suppliers to training employees to tracking financial growth all became transformed with the ease and access to new and faster information.
Then it was as if somebody realized that was not enough. Regardless of how technologically advanced the companies were, they were still faced with the nuts and bolts of doing real business with real people. Whether it is individual customers or business-to-business transactions, companies are looking for new and better ways to integrate their customer service operations into the business. Viola! A hot new sector in the IPO marketplace is born.
Customer relationship management is expected to be an $11 billion worldwide market by 2003, up from $1.9 billion in 1998, according to International Data Corporation. Two companies slated to hit Wall Street next week want to capture a part of the action.
Chordiant Software, Inc., promises to help improve its client's relationship with customers, whether it is through the Web, e-mail or just over the phone. The company says it offers marketing services, sales programs, e-business services and customer support.
The Cupertino, Calif., company has already inked high-profile deals with Bank One, First USA, Metropolitan Life and Royal Dutch KLM Airlines.
Those high-profile customers should help ensure Chordiant strikes the right note with investors when it hits the street next week. It expects to raise some $40.5 million when it offers some 4.5 million shares. The company says it will use the proceeds for general corporate purposes.
Like most high-tech IPOs these days, Chordiant has lost more money than it has made. The company reported a 1998 net loss of over $17 million on revenue of some $12.4 million.
Though it is an increasingly crowded market that Chordiant is entering, it is also a lucrative one for the companies already there.
Some of those companies involved in the same sector, including Kana Communications, Inc., Vignette Corp., and Siebel Systems , Inc., have seen rising stock prices and leaning towards "strong buy" recommendations from analysts.
Delano Technology Corporation is slated to come to Wall Street next week with a slightly larger offer, and an expanded business plan which promises to do more than just help coordinate customer service. The Toronto-based company is slated to offer some 5 million shares on the Nasdaq in the range of $11 to $12 a share, hoping to raise some $63.3 million.
Delano makes software which enables companies to use e-mail and the Web to automate business processes, according to the company. With the Delano e-Business Interactions Suite, the company's software platform, companies can automate and personalize electronic interactions and relationships with customers and clients.
That includes managing customer interactions, as well as finding new customers and coordinating business transactions between suppliers and partners.
The company is new, and has reported no revenue for the last fiscal year. But Delano has recently inked licensing agreements with BCE Emergis, Charles Schwab of Canada, Clarify and Ericsson.