"This is very significant for both Chordiant and our prospective customers. It builds out an ongoing relationship we have with IBM and gives Chordiant a lot more credibility in the market," says Paul Burrin, senior vice president of worldwide marketing.

The agreement enables Chordiant to gain a bigger piece of the market share pie, valued at roughly $2 billion for the insurance sector alone, says Burrin.

IBM will provide insurance customers with a scalable infrastructure to manage high-volume transactions, whereas Chordiant will provide the application software suite.

The Strategic Alliance partnership is the highest level of commitment between IBM and an ISV -- one in which companies such as Siebel, PeopleSoft, and SAP already participate in. Under this agreement IBM offers joint marketing and sales activities to member ISVs, providing that the ISV sells IBM hardware, middleware and services.

The joint IBM and Chordiant solutions help insurance providers reduce costs associated with customer management, including the costs associated with providing services and improving marketing effectiveness and lead management.

"Tom Siebel has recently said CRM as we know it is dead. The future of CRM will be much more around enterprise business process computing and Web services and that is exactly what Chordiant brings to the market," Burrin says.

The majority of Chordiant's customers still come from Europe, but executives at the company expect this partnership to help increase its current U.S.-generated revenue from 25 percent of overall revenue to 50 percent by the end of 2003.