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Epiphany to get Octane boost this quarter

The e-commerce software firms will complete their deal by the end of May and will have fully integrated the new operations by the end of the quarter.

Epiphany will complete its acquisition of Octane by the end of May, said Epiphany chief executive Roger Siboni, and the company expects to have fully integrated the new operations by the end of the quarter.

The San Mateo, Calif.-based software company also expects to beat analysts' expectations of breaking even by the first quarter of 2002, Siboni said today at the Chase H&Q Technology Conference in San Francisco.

Epiphany's desire to acquire privately held Octane was spurred by the two companies' compatible but not overlapping product mix. Epiphany software analyzes data collected from Web sites to determine the effectiveness of marketing efforts, while Octane software streamlines customer relationship management, or CRM.

But like many executives searching for acquisition targets, Siboni said the deal is strategic for another reason: It allows Epiphany to tap new employees without having to recruit and train them from scratch. Finding and keeping talent is one of the biggest challenges facing every segment of the technology industry, from semiconductors to e-commerce.

"Almost overnight, Octane allowed us to double our sales organization, double our engineering organization," Siboni said. "We're pleased about that."

The problem of retaining workers is especially acute for companies with offices in Silicon Valley and elsewhere in California, where technology employee turnover rates are high, and companies have become shrewd poachers of competitors' talent. At the Chase H&Q conference, a four-day gathering of more than 4,000 technology investors and executives that ends today, numerous executives expressed concern about the difficulty of luring talent, while subsequently boasting that they had plucked senior management teams from rival firms.

"Certainly a key component for us is in the area of attracting and integrating new personnel," said Thomas Munro, chief financial officer of San Diego-based Wireless Facilities.

The network management company, which has hired people from 41 countries and has acquired six companies in two years, ended last year with 828 employees and finished out the first quarter with more than 1,000.

"That says that managing growth is a substantial challenge, but certainly not a weakness," Munro said.

For Epiphany, Octane employees were especially valuable: Most of them already work in San Mateo, about a half-mile from their new parent company's headquarters. Many employees are loath to relocate or significantly increase their weekday commute when their company is bought by a far-off rival.

"The joke is that we only acquire companies that are within a half-mile of us," Siboni said.