Riding the coattails of media-hound

Salesforce.com

, fellow customer relationship management (CRM) software vendor

RightNow Technologies

filed for an initial public offering this week. RightNow is hoping to raise about $60 million primarily for working capital but has not yet disclosed a price or share count.

Like Salesforce, RightNow provides software on demand -- software delivered via the Internet as a hosted service -- and stands to gain from the growing desire of companies to contract out their software and avoid complicated installations. But while Salesforce specializes in software that automates sales and marketing processes, RightNow focuses on applications for customer service and call centers -- and consequently it is poised to gain from the offshore outsourcing boom.

RightNow's recent S1 filing with the

Securities and Exchange Commission

actually marks its second attempt to go public. The first came in April 2000, but RightNow dropped that effort in November 2000 as investor ardor for IPOs and all things tech was rapidly cooling. (Credit Suisse First Boston was lead underwriter on the would-be offering in 2000; Morgan Stanley and San Francisco-based Thomas Weisel Partners are co-leads for the current offering.)

"It's good that the four years have passed because they have been able to stay alive and still effectuate this business plan," said David Menlow, president of IPOfinancial.com. "There will be some eager participants to get involved in this deal."

Indeed, after pulling its original IPO attempt, RightNow continued to post higher sales, reaching 25 consecutive quarters of sequential revenue growth and eight consecutive quarters of positive cash flow from operations in March.

Investors should especially like the fact that RightNow's bottom line edged into the black for the first time in March, when it posted a $76,000 quarterly profit on $12.9 million in revenue. That represented a 65% jump in revenue from the same period a year ago and considerable improvement over the company's biggest loss -- of $19.6 million -- in 2000.

"This

on-demand model has really caught on," said RightNow CEO Greg Gianforte, who started the company in 1997 out of a spare bedroom in his Bozeman, Mont., home. "It eliminates the headaches and the costs associated with the infrastructure of enterprise software."

Menlow dubbed RightNow's consistent revenue growth "very nice," albeit not necessarily as steep as the growth rates seen during the height of the dot-com boom. But in stark contrast to some companies of that bygone era, RightNow may be on the road to its first profitable year. "This is a positive and reassuring step for investors," he said, while acknowledging that a whole year of profits already on the books would be even stronger.

In 2003, RightNow lost $4.1 million on revenue of $35.9 million, compared with a $2.8 million loss on $26.9 million in revenue in 2002. (By comparison, Salesforce earned $3.5 million on $96 million in revenue in its fiscal year ending Jan. 31, 2004, after losing $9.7 million on $51 million in revenue in fiscal 2003.)

Gianforte declined to comment on the offering or whether RightNow's first profitable quarter prompted the company to revisit its IPO aspirations. With only $8.4 million in cash, $1 million in long-term debt and a $44.4 million accumulated deficit, RightNow could certainly use a stronger balance sheet, especially considering it's competing against the world's largest software vendors, including

Microsoft

(MSFT) - Get Report

,

SAP

(SAP) - Get Report

,

Oracle

(ORCL) - Get Report

,

PeopleSoft

(PSFT)

and

Siebel Systems

(SEBL)

.

Of those, however, only Siebel has made an aggressive, high-profile move into the hosted CRM space, a move prompted in part by a decline in ordinary software sales amid competition from Salesforce.com.

RightNow, of course, is still a fraction of the size of Salesforce.com. But as another company offering software on-demand, RightNow still could benefit if Salesforce's IPO makes a splash, much in the same way pundits have speculated Google's higher-profile IPO could benefit Salesforce's offering.

If that chain of events unfolds, the time may indeed be right for RightNow.