Event

On 9 October 2012, Lithium Technologies announced that it acquired former partner Social Dynamx for an undisclosed sum. The deal closed four days earlier. Social Dynamx, rebranded as Lithium Social Web, will operate as an independent business unit under Mike Betzer. The former Social Dynamx CEO assumes the role of senior vice president and reports to Lithium CEO. The combined companies have a head count of more than 260, including 20 to 30 employees from Social Dynamx.

Analysis

Lithium, a Leader in Gartner's "Magic Quadrant for Social CRM" , has accelerated its push into the social customer care market with this acquisition. Lithium is best known for its hosted peer-to-peer communities; Social Dynamx's solution helps businesses manage customer support across Twitter, Facebook and other social channels. Because the companies have been partners, their products have been integrated.

With the Social Dynamx acquisition, Lithium:

• Moves a step closer to providing a more complete social customer service solution, yet needs a core CRM database.
• Gets an opportunity to upsell its newly acquired product to current clients considering integrations with outside best-of-breed social media engagement vendors
• Gets an opportunity to expand its presence in call centers as they evolve into customer engagement centers.
• Risks changing the dynamic of its relationship with salesforce.com. It emerges as both a competitor to and integration partner of salesforce.com, which will roll out Chatter Communities in early 2013. Other rivals to Social Dynamx include Dimelo and Kana.

Lithium currently relies on partners for a customer management database solution. As a result, Lithium clients need to integrate social customer records with traditional customer records to get a 360-degree view of the customer.

Current Lithium customers:

• If you have not implemented social engagement solutions for customer service, look at Lithium Social Web and its intuitive customer service design to complement Lithium communities.
• If you are using Scout Labs as a social customer engagement solution, look to upgrade to Lithium Social Web because it can handle more complex social customer service operations in workflow, assignment, prioritization and access to an existing knowledgebase.
• If you are using an alternative social customer engagement solution for customer service, evaluate your current solution's ability to integrate with the primary customer record, the core CRM component. Depending on your current solution's sufficiency, consider Lithium Social Web at the end of your contract term.

Organizations seeking a social customer service solution:

• Consider Lithium in the peer-to-peer community support space with an opportunity, yet unproven, to excel in the future as a broader social customer service solution.

Some documents may not be available as part of your current Gartner subscription.

• "CRM Technologies for the Emerging Customer Engagement Hub" — Understand three major changes to facilitate customer engagement. By Michael Maoz
• "Critical Capabilities for Peer-to-Peer Customer Community Software" — Our research helps organizations evaluate popular vendors. By Jenny Sussin, Michael Maoz and Adam Sarner