Menlo Park, Calif.-based Kana, a publicly traded company, also posted $25 million in sales in Q1 this year -- steady revenues that even showed slight growth over Q1 last year. Kana's flagship iCare software suite is aimed at contact centers and touts an in-bound and out-bound e-mail management system, Web self-service and marketing and analytics. (Unlike rival offerings, Kana has chosen not to tailor its software to different verticals, preferring to sell through third-party integrators who have experience customizing products to certain markets.)

Bud Michael, executive vice president of products and marketing at Kana, believes customer-support interactions are moving rapidly to the Web, and there needs to be a scalable system to handle the convergence of Web self-service, e-mail and traditional telephone calls. "Kana's Web-architected solutions are ideal for the telecommunications industry, in that they can scale to high volumes of interactions while keeping costs at a minimum," he said, in a statement.

ADC Telecommunications already claims to have reduced phone calls by 25 percent, thanks to Kana's iCare software. "Since implementing Kana's solutions, ADC now provides both internal and external users with easier and faster access to the most up-to-date information available," said Candyce Anderson, business analyst at ADC. "We can now provide consistent answers to commonly asked questions, and as a result, have fewer phone calls. In addition, we have more time to answer detailed questions, leading to better service for our customers."

ADC isn't alone in hoping CRM can alleviate oft-overrun call centers. Fujitsu Consulting, for instance, recently surveyed 45 leading telcos and found strong CRM adoption. Thirty eight percent of respondents have completed a CRM initiative, trailing only utilities (58 percent) and financial services (46 percent). "We've established that CRM is at the forefront of telecommunications' companies," says Deborah Czerna, associate director at Fujitsu Consulting.

Kelly Spang, analyst at Current Analysis, is bullish on Kana but believes the company may be leaving money on the table by not promoting itself as a broader CRM player. "Kana is on fairly stable ground focusing on e-service and has a good foundation in analytics and operations," she says, adding, "now they need to break out from that pigeonhole of e-service. There's a lot of opportunity in e-marketing."

Kana though, is comfortable with its product positioning in the e-marketing space; the iCare suite includes three e-marketing modules addressing campaign management, cross-marketing with call centers, and building data warehouses. And Kana boasts marketing analytics software for segmenting customers and targeting certain groups. At least one large catalog retailer uses Kana's e-marketing software to deliver millions of marketing messages a day, claims H.A. Schade, director of products at Kana.

But Spang is right when she says e-marketing has taken a backseat to e-service at Kana. Even Schade admits, "In the last six quarters, very few enterprises have chosen to invest in e-marketing, instead choosing to focus on retaining customers." Of course, Shchade is quick to point out that this doesn't mean Kana is behind the e-marketing eightball. "When the economy turns -- and it will turn -- we have e-marketing products at the ready to take advantage of this when it happens," he says.