"Salesforce is a great home for my baby"

Moshe BenBassat

ClickSoftware founder Moshe BenBassat: What happens to my people, whom I worked with for 20 years, is very important to me. The atmosphere in the deal was one of mutual commitment.

In another success for Israeli technology, Petah Tikva-based ClickSoftware is being sold to US company Salesforce at a $1.35 billion valuation. Moshe BenBassat founded ClickSoftware over 20 years ago, brought it to Nasdaq for its IPO, and led it to a first exit in 2015. ClickSoftware develops systems for logistic management of customer service systems in the field.

"My expertise in artificial intelligence began in the 1980s," BenBassat tells "Globes." "It was the dawn of artificial intelligence, and there was naturally a great demand for lectures and consultation. I began hiring people, and for 10 years we mainly developed artificial intelligence systems for all sorts of uses, many of them for the Ministry of Defense. A group of people formed with a great deal of know-how and ability in artificial intelligence."

"One of the projects we did for the IDF was building an annual activity plan for the air force, and it was a great success," BenBassat adds. "To this day, all of the IDF's activity is based on the software that began then and that helps to decide who does what, why, where, and when. We saw that there were many other uses, and in 1997, we began founding a company focused on a specific area, based on the same technology. We saw that in service provision, companies used programs to send invoices and to record the particulars of their customers, but not to make complicated decisions.

"For example, power and gas companies receive thousands of service calls a day, and every caller wants fast service. The problems encountered by the service manager are which technician to send to which customer, in which time span, with which equipment, and what travel route he should take in order to service as many calls as possible and as fast as possible. Mathematically, this is a very  complex problem. We had a basis for with in we did for the military, and that's how ClickSoftware began.

"While dealing with the day-to-day problem for the service market, we very quickly realized that handling the problem on the service day itself was only the beginning, and that it was worthwhile starting to address the question of how many people to hire, when to send them for training, and so forth. That's how we started with service systems management and became the leader in it. We raised a little venture capital, broke through very quickly, and by 2000, we were already a public company on Nasdaq," BenBassat relates.

The company's performance in the capital market was not outstanding. Today, BenBassat says, "There were two economic crises and all sorts of circumstances, but in retrospect, the company grew at a good pace of 20% a year. Today, the company places almost a million service technicians, with four service calls a day for each of them. Some of the customers are among the largest mobile phone and powerc companies in the world.

"The company grew and continued to lead the global market in the sector, and in 2015, we became a private company. As a public company, if you get an acquisition offer, you are obligated to bring it to the shareholders, and if the price is good - and it was good - you have to accept the offer. Private equity companies acquire companies in order to improve them and to realize their full potential. We already had a connection at the time with Salesforce, and they had a license to sell our product.

"Salesforce realized that our product was good. They are satisfied customers, and that led to the deal you heard about today. As the company founder, what happens to my people, whom I worked with for 20 years, is very important to me. The atmosphere in the deal was one of mutual commitment. I must say that Salesforce is great home for my baby, and I'm very happy about the deal. Today, I'm a faculty member at the Interdisciplinary Center Herzliya, teach a course in artificial intelligence, and advise startups on business uses of artificial intelligence," BenBassat declares.

Prolonged cooperation

ClickSoftware develops systems for logistic management of customer service systems in the field: receiving a support call, sending technicians, monitoring the results of the visits, etc. The company's offices are in Petah Tikva, and 200 of its 600 employees worldwide are in Israel. ClickSoftware was listed on Wall Street from 2000 until 2015, when it was acquired for $438 million by Francisco Partners, which delisted it from Wall Street. ClickSoftware has been a private company for five years. In 2015, it reported $126 million revenue and projected $140-145 million for 2016.

Despite its upheavals and unique path, ClickSoftware remained fairly anonymous and attracted little attention. The big beneficiary from the company was Francisco Partners, which substantially raised ClickSoftware's valuation in a fairly short time.

For Salesforce, the system offers service providers predictive capabilities and insights about customers based on data from all of Salesforce's applications. A person in the field can utilize insights of sales personnel, and sales personnel can see all of the customer's interactions, including with the service personnel in the field. In order to successfully serve the service personnel in the field, Salesforce has developed the service so that it will work on a mobile application that does not depend on an Internet connection.

Growth through acquisitions

Salesforce has acquired five other Israeli companies besides ClickSoftware. In 2011, it acquired Navajo Systems, which developed information security for cloud computing, for $30 million, and Navajo Systems became Salesforce's R&D center in Israel. This was followed by the acquisition of artificial intelligence companies BlueTail and Implisit Insights, whose technology was integrated into Salesforce's Einstein AI engine. Last year, it acquired Datorama for $800 million, and last May, it acquired Bonobo, which raised only $4.4 million before the acquisition. In addition to the acquisitions, Salesforce's investment arm is also active in Israel, investing in six companies to date.

When Salesforce's other acquisitions are examined, it can be seen that it is trying to expand into new areas. The acquisitions of BlueTail and Implisit supported its AI platform, and helped Salesforce grow from a customer relations management company into a company that also provides analyses of the data collected in the system. All of these acquisitions are built on the same principle: instead of Salesforce's customers having to turn to external services to analyze the data that they accumulate, Salesforce wants to supply all of its customers' needs.

Following the acquisitions, all of ClickSoftware's employees everywhere in the world will join Salesforce. The ClickSoftware team in Israel will join Salesforce's local site, which will then number 600 employees. "We declared that the Israeli site is strategic. We're going to substantially increase the site's size," says Salesforce Israel VP development Elad Donsky.

In January this year, it was reported that Salesforce had begun negotiations to acquire ClickSoftware several months after acquiring Datorama for $800 million the previous year. Salesforce provides enterprise software services for managing a company's activity systems, headed by its customer relations management system. Salesforce announced that the purpose of the deal was to support a service designed to enable companies to connect a mobile labor force and manage it on a single centralized platform.

Salesforce launched the service in 2016 in cooperation with ClickSoftware, with which it was already collaborating. "In 2016, we launched a product developed in very close cooperation with ClickSoftware in management of field services. After we launched the product, it was a huge success among our customers worldwide, and field service is one of the fastest growth areas in our company. It represented very important growth for us in this market, and also for ClickSoftware. This was a very close partnership. We worked together with our teams and those of ClickSoftware. So we recently decided that we wanted to take it one step further," Donsky told "Globes."

Published by Globes, Israel business news - en.globes.co.il - on August 8, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Moshe BenBassat
Moshe BenBassat
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018