Verint Systems’ Acquisition of Witness Systems a Done Deal

Patrick Barnard
Group Managing Editor, TMCnet

Verint Systems’ Acquisition of Witness Systems a Done Deal

United Kingdom antitrust regulators today cleared Verint Systems’ $950 million purchase of Witness Systems Inc., citing that the deal will not result in a “substantial lessening of competition within a market or markets” within the UK.

Verint is a leading maker of call recording and speech/data analytics solutions, while Witness is a purveyor of workforce management, quality monitoring/recording, back office, IP telephony, customer feedback and eLearning solutions. Verint’s acquisition of Witness officially closed on May 29.

Together the two companies offer the broadest portfolio of software solutions for the contact center and enterprise performance market. With more than 2,500 employees spread across 18 countries worldwide, the new company will be among the 30 largest software companies in the world. It will boast more than 5,000 customers in 60 different counties, including many Fortune 100 companies.

Earlier today, TMCnet had the opportunity to do a brief phone interview with Ryan Hollenbeck, VP of global marketing for Verint’s new division, Witness Actionable Solutions. He discussed some of the details of the merger and where the combined company is heading from here.

“So as of last week we are officially closed and one company, so good news there,” Hollenbeck said enthusiastically. “As you know it takes a while to get through a merger of this size but we’re officially through all the regulatory approval, which is a good thing for the customers - and for everybody.”

Hollenbeck said not only does the deal give both companies a significantly expanded global footprint, it also provides both with an extremely broad customer base which “scales all the way down to very small businesses and all the way up to Fortune 100 companies … so it really is a very disparate group of customers.” Markets served by the combined company include financial services, telecom and insurance.

Hollenbeck said in terms of combining the customer base, “we’ll be protecting all customers’ existing investments – so we have a commitment that we’ve already stated in writing that we will continue to support all existing applications and platforms.” Plus he added that “both companies have a history of innovation, so we’ll continue to enhance the solution set and you’ll have an upgrade path – as a customer – to new solutions.”

In terms of support services and R&D, Hollenback said the new company “will have much greater scale” than the two had individually.

“If you look at the global R&D function of both companies - and at the support services as well - as a combined unit we’re in a real strong position,” he said. “We will be able to continue to bolster our support organization worldwide - plus with all the new R&D personnel that we’ll have, we are in a great position to deliver new innovative solutions to the market.”

He added: “If you look at what our portfolio looks like out of the gate, it is one of the broadest portfolios around contact center, WFM and actionable intelligence to have ever come together. And if you look at the sets of tools that a contact center needs to manage to excellence - and by that I mean the tools needed to gain efficiencies, build customer loyalty and increase revenue – we will be the new market share leader.”

Hollenbeck said the two companies, which have been partnering for years, are an almost perfect fit and that there will be very little overlap in terms of the two companies’ product sets. He said prior to the merger, “Verint customers were asking for WFM, eLearning, and customer feedback solutions … whereas Witness was being asked for speech and data analytics. So coming together made a lot of sense for both us, because now we can bring all those solutions to market.”

But what about integrating all of these solutions together? How will that process take place? Hollenbeck said basically it will be a “three phase approach.” He said in “Phase One” which will start “right out of the gate,” customers can expect to see “package solutions,” where you’ll be able to purchase “speech analytics and recording tools combined with eLearning that you can’t purchase from anyone else.” Phase Two of the integration process, he said, will involve the “integration of certain products into on combined product;” and Phase Three (in 2008) “will be the development of a single, integrated platform supporting all of the products.”

Hollenbeck said although there will be a lot of work involved in doing all this, the two companies have already been planning a roadmap for the past several months, “behind the scenes” as they prepared for the merger. In this planning phase, they closely analyzed the integration process, “looking at every project going on in product development and marketing and support,” and developed a detailed strategic plan for gradually integrating both product portfolios.

Meanwhile, he said, the two companies are fortunate enough to have worked together for while, which means their products are already compatible. In fact, he said both companies “had already begun the process” of integrating their apps – so quick integration capabilities are already built into both product sets. So, some of the integration work is already done.”

“Fortunately, there’s a lot of technology out there today that makes it much easier to make applications work together - things like SOA for example - so while not all of the platforms are identical, there are enough similarities to allow us to carry forward,” he said.

In terms of facilities, Hollenbeck said the company will continue to maintain the two corporate headquarters (Verint’s headquarters in Melville, N.Y., and Witness’s headquarters in Atlanta, Ga.) plus the offices Witness acquired when it acquired Blue Pumpkin in Santa Clara, Calif., and the office in the UK it acquired when it bought Eyretel in 2003. “So its kind of like we have hubs in each of those areas … and we’ll continue to have those on a going forward basis because we have so many engineers and support personnel in each of those locations,” he said, adding that the company will likely consolidate some of the numerous field offices it now has in India.

And what about the people picture? Well, obviously it’s always hard to say, but Hollenback said “to Verint’s credit, they’re really trying to bring the best of the two companies together … and the two really do neatly fit toagther … so I think we’re looking at single digits, if at all.”

Witness currently has about 1,000 employees, while Verint has about 1,500.

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Patrick Barnard is Assignment Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit Patrick Barnard’s columnist page.

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