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Pivotal turns skyward on Microsoft, Cisco deal

Shares of the small customer relationship software maker soar more than 75 percent following news that Microsoft and Cisco Systems picked the company for their applications hosting programs.

Shares of small customer relationship software maker Pivotal today soared more than 75 percent following news that Microsoft and Cisco Systems picked the company for their applications hosting programs.

In early trading, Pivotal gained 16 points, climbing to 37.13. Pivotal said it will work with Microsoft, Cisco, and application service providers, including Data Return, FutureLink, Interliant, and Qwest, to deliver customized business applications, data center and networking services, and support.

The deal is one of many that front office software makers, which provide software to support call centers and sales forces, have inked with larger industry players recently as the industry moves more deeply toward application rental.

Under an application service provider model, a customer rents software from the application service provider, which manages the application remotely from a data center. The model eliminates the need for customers to hire staff to manage the applications.

In recent days, several customer relationship management companies have watched their stock skyrocket after inking deals with bigger players in the industry. Last week, Clarify saw its shares jump more than 37 percent after it was acquired by networking giant Nortel for $2.1 billion. Clarify, which until then traded in the low 40s, saw its stock trade in the high 60 range.

The customer relationship management (CRM) software market will reach $16.8 billion by the year 2003, with a compound annual growth rate of 49 percent over the next five years

"[CRM] is the most strategic business application people will make in the next few years," said AMR analyst David Caruso.

Caruso said today's deal should also help boost Pivotal's sales.

"You've got some real big guns behind this small company with Microsoft and Cisco hosting," he said.

Pivotal's Web-based customer relationship management applications enable companies to manage their sales, marketing, and customer service needs between employees, partners, and customers through a Web browser on any type of network or mobile client, the company said.

The Pivotal hosted products, to be marketed under the PivotalHost name, will be delivered on Microsoft BackOffice and Cisco System's networking.

In other news, Pivotal said it will take its first move into the wireless space by delivering its Web-based customer relationship management applications via handheld devices. The company said its customers will be able to access its customer relationship management applications by using a Blackberry wireless device created by Research In Motion Limited.

Pivotal also said it will work with DataLan, which is integrated with the Blackberry product, to allow its users to easily and quickly access information through an interface that features icons and pull-down menus. Through DataLan's products, users can select information and post a query to the Pivotal customer relationship management database and when requested information is retrieved from the database, the response is sent to the Blackberry handheld in email form, the company said.

Other business software firms such as Siebel, along with Oracle and SAP, have already offered a similar feature to its users. Earlier this month, Siebel said it will deliver its front office applications on several Microsoft CE handheld devices. In September, Oracle said its Internet-enabled customer relationship management applications will run on various 3Com Palm devices. SAP and Microsoft also unveiled plans to develop technology for connecting Microsoft Windows CE-based and other mobile devices to SAP's business applications.