On-demand CRM vendor Salesforce has bought InStranet, maker of knowledge-base management technology for call centers.

The deal is worth $31.5 million and closed Aug. 4, said Brett Queener, senior vice president of applications at Salesforce.

View a slide show of 2008's hottest tech M&A deals.

InStranet's software processes content based on different parameters, such as the type of document or related department within a company. This improves call-center and self-service portal performance because knowledge-base search results can reflect an end-user's particular context, according to Salesforce.

"When you finally get to an agent on a phone or a portal, you often get a long list of unrelated answers, leading to frustrations," Queener said.

Technology like InStranet's, which focuses on customer satisfaction as opposed to transactional sales processes, is becoming a must-have for CRM vendors, according to China Martens, an analyst with the 451 Group.

"This is something that was expected," Martens said. "It gives them a story in customer service; they have something already, but it's not as sophisticated as this."

The deal will also give Salesforce "more oomph at the high end of the market," Martens said. InStranet's software is used by 350,000 call center agents, according to Salesforce. Customers include Comcast and 3M.

Salesforce has not yet determined pricing for the InStranet software, which, unlike Salesforce, is deployed on-premises. The vendor plans to develop an on-demand version that will be out sometime in 2009, Queener said.

The IDG News Service is a Network World affiliate.