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Verint and Witness: A Heavyweight For The Call Center Marketplace
[February 14, 2007]

Verint and Witness: A Heavyweight For The Call Center Marketplace


Editorial Director,
Customer Interaction Solutions magazine
 
News came over the wire Monday that Verint Systems, Inc., a provider of analytic software-based solutions for security and business intelligence, and workforce optimization company Witness Systems (News - Alert) have announced they have entered into a definitive agreement under which Verint plans to acquire Witness for $27.50 per share in cash.


 
The total enterprise value of the planned transaction is approximately $950 million (which excludes Witness’ cash). Verint expects to fund the transaction through a $650 million debt financing commitment provided by Lehman Brothers Inc., Deutsche Bank and Credit Suisse; a $293 million preferred stock investment by Comverse Technology (News - Alert), Inc., the 57 percent shareholder of Verint; and the remainder from existing cash of the combined company. 
 
Make room, Aspect and NICE, for another heavyweight contender in the call center space. The convergence of Witness’ workforce optimization and Verint’s actionable intelligence is expected to create a broad portfolio of contact center and enterprise performance solutions, “delivering a compelling new vision for the customer-centric enterprise,” according to the companies.
 
The combined Verint/Witness portfolio includes solutions for a respectable majority of a call center's needs: quality monitoring, IP recording, multimedia interaction capture, speech and data analytics, performance management, contact center and enterprise workforce management, e-learning and e-coaching, customer feedback management and a full range of strategic professional and consulting services.
 
The combination is expected to enable companies of all sizes — small to mid-sized companies and large organizations — to leverage customer intelligence for better business decisions and optimize workforce, contact center and enterprise performance to deliver a compelling customer service advantage. 
 
“Verint and Witness share a similar culture with a passion for growth, results-driven execution and a laser focus on customer success,” said Dan Bodner, President and CEO of Verint Systems (News - Alert), Inc., in a statement. “This strategic move will create a platform for rapid organizational growth and provide a wealth of opportunity for our global employee population.”
 
On Tuesday I spoke with Ryan Hollenbeck, VP of Corporate Marketing for Witness Systems.
 
First, I went straight for the most superficial question: What's the new company name going to be? Ryan indicated that details such as corporate name, location and personnel will be worked out in the coming months, while the transaction waits for regulatory approval.
 
In terms of the meat and bones of the merger, Hollenbeck said, “The combination is all about convergence: about workforce optimization from Witness and performance optimization from Verint. It’s going to allow customers to solve a broader set of business challenges than they could do with any other solution.”
 
So what elements will come from where and how will they mesh?
 
There are currently no speech analytics in Witness’ Impact 360 product, so the merged entity will be picking up those increasingly important capabilities from Verint. Verint, as readers may remember, has a very strong focus on consulting as a result of the company’s acquisition of The Opus Group in September 2005, and those capabilities will carry strongly into any combined solutions.
 
Verint currently has no workforce management solution, so the merger with Witness makes a great deal of sense on that front.
 
In December of 2006, Witness purchased Amae Software, which gave the company a strong component for surveying and customer feedback. This allowed Witness to enhance its actionable learning and competency-based learning offerings. ‘Competency-based learning’ is a term Witness uses to describe call centers taking evaluation scores from their quality monitoring solutions and use that information to evaluate skill gaps and deliver learning chunks to teach agents how to improve their performance in the areas they are weak.
 
Both companies, of course, offer quality monitoring and recording solutions, and therefore there is overlap that will need to be solved. When I asked Hollenbeck how that will be resolved, he responded, “For the near term — and we've got to get through the regulatory period — both companies will continue to sell, offer and support their recording solutions for the near future, and I expect that will continue well into the future to support customers.”
 
When I asked about customer overlap between the two companies, Hollenbeck stated that there is not as much customer overlap as one might imagine, since both companies originally came out of the recording arena (recall that Witness’ workforce management capabilities came from its 2004 acquisition of Blue Pumpkin), so Witness and Verint competed for customers in most cases.
 
Additionally, Verint has a strong presence in areas that Witness has never ventured, including areas either tangential to or entirely outside the call center market: networked video solutions and communications interception and analytics solutions (i.e., communications security).
 
“We [Witness] were the stronger business in the contact center, and they [Verint] were stronger in the security space,” added Hollenbeck.
 
The transaction is expected to close this spring, at which time further details will be available about the practical considerations of the merger. I will keep readers posted.
 
To read more about Witness Systems and Verint, visit their respective Web sites at www.witness.com and www.verint.com.


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