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Baan taps Net business boom with new subsidiary

The business software firm says it will form a subsidiary providing customer relationship management software to dot-com start-ups and Internet companies.

Business software maker Baan today said it plans to form a new subsidiary aimed at providing customer relationship management software to dot-com start-ups and Internet companies.

Baan stock The as-yet unnamed subsidiary, is expected to open in June, based in Golden, Colo. The new unit will focus on selling companies its customer relationship management (CRM) software and services. Those products include Web-enabled applications that automate a company's sales, marketing and customer call center needs, as well as procurement software and sales configuration software.

Today's move highlights changes taking place at the struggling firm, as it pushes forward with a broader strategy to focus on the Internet, the business-to-business e-commerce sector and more lucrative markets for business applications, such as CRM software.

In the past few months, the Dutch firm has been troubled with financial hurdles and an executive management shuffle. In January, the company issued a profit warning and announced the resignation of CEO Mary Coleman. Since then, the company's stock has plummeted as it implements a company-wide reorganization announced in the beginning of the year.

Like its rivals Oracle, SAP, PeopleSoft and JD Edwards, Baan has been shifting its focus to providing Web-friendly front-office software and moving away from its core business--software that manages a company's back office, such as its human resources, manufacturing and financial needs.

The market for CRM software continues to grow at a fast rate. According to market research firm International Data Corp., the worldwide market for CRM software is expected to reach $11 billion in 2003, up from $1.9 billion in 1998.

Baan said its new subsidiary will give the firm a direct focus on the Internet, helping companies that do business online use CRM software to improve their customer relationships, including building retention and improving service. The subsidiary is also designed to take the firm into new markets, the company said in a statement.