{"id":7621,"date":"2010-07-22T03:22:47","date_gmt":"2010-07-22T10:22:47","guid":{"rendered":"http:\/\/www.web-strategist.com\/blog\/?p=7621"},"modified":"2010-07-22T08:30:25","modified_gmt":"2010-07-22T15:30:25","slug":"first-take-analysis-jive-fills-warchest-ready-to-battle-enterprise-software-giants-ipo","status":"publish","type":"post","link":"https:\/\/web-strategist.com\/blog\/2010\/07\/22\/first-take-analysis-jive-fills-warchest-ready-to-battle-enterprise-software-giants-ipo\/","title":{"rendered":"First Take Analysis: Jive Fills Warchest, Ready to Battle Enterprise Software Giants, IPO"},"content":{"rendered":"

By Industry Analysts, <\/em>R “Ray” Wang<\/a><\/em> @rwang0<\/a><\/em> (Enterprise Strategy) and <\/em>Jeremiah Owyang,<\/em><\/a> @jowyang<\/a><\/em> (Customer Strategy) both founding partners at Altimeter Group<\/em><\/p>\n

Community Platforms Evolve to Social Business Category<\/strong>
\nHaving tracked the social business category <\/a>for some years now, and have been watching the category grow, and expand into other niches. \u00a0At first, the community platform space (like Jive) was insular, focused on only on enterprise communities, but has now grown into Social CRM<\/a>, Application Platforms<\/a>, Social Media Management Systems<\/a>, Brand Monitoring<\/a>, corporate email systems<\/a> and eventually to deliver a customer experience that’s native to the customer. It may be social, it may be mobile, it may take even radical forms in including in store displays.<\/p>\n

The Situation C Round Funding<\/strong>
\n<\/strong> Jive, who recently raised a $15mm in 2007 has capped off their war chest with a hefty $30mm ‘C round’ for a total of $57.5 million in total. \u00a0Why this large amount? \u00a0‘D rounds’ are virtually non-existent out of Sand Hill road, and if they need investment they’ll have to get from a partner corporation.<\/p>\n

Altimeter Group SWOT Analysis<\/strong><\/p>\n

Strengths:<\/strong>
\nJive has been hailed as a leader in the social software class, (Forrester Wave,<\/a> and three Gartner Quadrants), and continues to show growth with large clients, claiming sales in the range of “$75,000-$150,000 per customer, closed ten $1 million deals, four of which closed in the last two quarters. While Jive is not yet cash-flow positive, he company has 3,000 customers, 15 million users, and will end the year on a $100 million run-rate” (source<\/a>). \u00a0Their\u00a0recent acquisition of brand monitoring company FiltrBox<\/a> demonstrates the pre-cursor of SCRM systems, and have made a variety of strategic partnership including with early-to-market social business consultants Dachis Group<\/a>. \u00a0They’ve recently hired a new CEO, Tony Zingale who is a seasoned leader of Mercury Interactive, where he clinched $1B revenues and lead a $5B acquisition to HP. \u00a0Lastly, they’ve shifted HQ from Portland to tech (and VC) centric Palo Alto.<\/p>\n

Weaknesses: <\/strong>
\nThey’re undergoing a cultural shift from a hip Portland startup, to becoming a tried and true enterprise player. \u00a0With a new CEO (Tony Zingale), and with a new CMO (Kiker has moved on) to take the helm soon, they’ll have to undergo both an internal mindset change as they shift to battle enterprise players. \u00a0\u00a0Also, as Jive takes on larger clients, they risk alienating their small and medium size clients who can’t afford, or can’t scale with Jive’s new value proposition.<\/p>\n

Opportunities: <\/strong>
\nExpect this war chest to be used to bolster the sales and marketing team. \u00a0C-rounds often focus on getting the company ready for a “material” event. \u00a0Jive will most likely use this time to build out significant partner channels and business development with enterprise clients. \u00a0Platform investments should support new partner models that support value added service growth. \u00a0Altimeter expects Jive to focus on bookings and immediate recurring revenue in order to maximize value for a “material” event.<\/p>\n

Threats: <\/strong>
\nKey threats come from larger vendors who may suddenly gain a “social” religion, they’re moving from dominating the small pond of community platforms to big and must bolster for a new type of battle in the enterprise application market. \u00a0Should an Oracle or SAP decide to enter the market, it may make overtures for an acquisition. \u00a0Salesforce.com and RightNow are the biggest CRM threats as they have integrated with key social business constituents and Chatter offers competitive features on an existing footprint of customers. Mainstay social business platform Microsoft Sharepoint can continue to win favor through having a large direct and channel sales force, and new vendors like Broadvision who stem from a traditional eBusiness heritage<\/a>. \u00a0Although they’ve been compared with Lithium in the past, we don’t see them as a direct competitor as both these vendors will develop friction directly with the larger enterprise software players. \u00a0\u00a0Jive’s CEO Tony Zingale has been quoted as diminsihing the incumbents as having Social media “bolt on” features<\/a> and Jive bloggers are already throwing bombs at CRM vendors<\/a>. \u00a0Yet, expect these incumbents to use their existing enterprise footprints, CIO relationships, and direct and channel sales teams to their advantage.<\/p>\n

Altimeter Group’s Take<\/strong><\/p>\n