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SAP signs software deal with Nortel

In a widely anticipated move, the German software giant says it has inked a deal with Nortel Networks to resell customer relationship management software.

In a widely anticipated move, German software giant SAP today said it has inked a deal with Nortel Networks to resell customer relationship management software from Nortel's Clarify application unit.

As part of the agreement, SAP said its customers will be able to use Clarify's contact center software, which will be completely integrated into its workplace, SAP's set of Internet-based business applications.

Customer relationship management (CRM) software automates and manages a company's sales, marketing and customer needs. Nortel acquired front-office software maker Clarify last October.

The move doesn't surprise analysts, who have been saying that SAP needs to resell third-party software to meet the needs of its customers, which have been demanding a front-office application. SAP, which has dedicated substantial time and money to its own suite of CRM software, has suffered from product delays.

The partnership bodes well for both parties, as it gives customers a "proven" CRM application quickly and lets Nortel tap into SAP's huge roster of customers, said Peggy Menconi, an analyst at AMR Research.

"SAP is in between a rock and a hard place when it comes to CRM," she said. "They've developed some products, which are functional and OK, but they are not thought leaders in the CRM market...It has just been extremely painful for (SAP) to come up with competitive products."

SAP rivals Oracle, PeopleSoft and J.D. Edwards have made efforts to tackle the market for CRM software, a sector widely perceived as the next big software land grab.

Oracle, which develops its own line of CRM products internally, also has experienced product delays. The database software giant began releasing key parts of its CRM product line earlier this quarter.

"(This deal) isn't going to give (SAP) thought leadership, but it does align them with a company that's one of the movers and shakers in the CRM market," Menconi said.

SAP and Nortel said they would target various markets for the newly combined product, including the banking, insurance, high-tech and communications industries, which typically have high-volume customer call centers. Pricing was not disclosed.

By combining Clarify's customer contact center application with the financial application, for example--a customer representative can view a wide range of real-time data on customers, including their most recent inquiries via phone or email and payment histories.

In addition, the deal calls for joint development, marketing and sales efforts for the service. SAP and Nortel said they plan to create "collaborative Web communities" where companies, partners and suppliers can address their joint corporate customers in real time. This will help customers eliminate the process of shuffling their problems or customer service inquiries to several companies at different times, the companies said.

The offering will be available this month and will be implemented within operations at both SAP and Nortel, the companies said.