Buys More Service With InStranet (NYSE: CRM) has bought multi-channel knowledge applications vendor InStranet for $31.5 million in a bid to add more service to the provider’s suite of software-as-a service products.

The deal, announced late Tuesday, enables to put improved service and support features in the hands of customers. InStranet specializes in knowledge base applications.

This is an area where “the industry hasn’t done a great job as a whole — marrying CRM with knowledge applications,” Al Falcione,’s senior director of product marketing, told

Salesforce claims InStranet’s application can be easily integrated with other infrastructure platforms such as document management, business intelligence, and CRM (customer relationship management). It uses industry standard protocols such as Java, XML, HTTP and XSL.

“We’re making a very strategic and aggressive acquisition in the customer service and support space, which is a $3.4 billion market according to Gartner,” Falcione said. “That’s one third of the CRM market,” he added.

The InStranet technology will be rolled into’s application development platform “so all applications running on our platforms will be able to use it,” Falcione explained.’s own customer service and support agents will be the first to get the technology, he added. has always been very aggressive in its approach. In April, it announced that it would offer its applications to businesses through the Google Apps cloud hosting platform. And last month, it announced that some of its business applications will run on the new Apple iPhone, shortly after that device hit the market.

InStranet for AppExchange was built on’s Appforce on-demand platform. According to Falcione, Gartner predicts that 75 percent of customer service and support will use software as a service (SaaS) by 2013.

Falcione said “looked at lots of different companies and InStranet won the gold for their technology and their solutions.” InStranet was awarded a United States patent for its multi-dimensional content organization and delivery technology in November 2006.

The two companies are not strangers to each other. InStranet and jointly announced the availability of InStranet for AppExchange at Dreamforce ’05,’s third annual user and developer conference, held in San Francisco September 2005.

InStranet for AppExchange uses customer profile information in applications as a filter to provide customer service agents immediate on-demand access to the right information, Falcione said.

InStranet’s technology categorizes a corporation’s knowledge into what Falcione called dimensions. These dimensions are defined by users; a satellite provider, for example, may set up dimensions such as receiver models, warranty plans, or regions it serves.

The dimensions are then tied back to the CRM database. A customer service agent taking a query keys the caller’s name and the dimension into the system to filter responses from the knowledge base and access the correct answer quickly.

Falcione said business users can set up the InStranet application using only a mouse. InStranet “can be deployed in a matter of two to 12 weeks, depending on the size of the company and the number of agents it has, because it’s all point and click,” he added.

Falcione said the first products based on the InStranet technology will be ready next year, but declined to say exactly when.

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