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Posted by Nigel Fenwick on July 22, 2010
This week, Jive Software, a leading player in social technology, announced it has closed $30 million in Series C financing, with Kleiner Perkins Caufield & Byers (KPCB) joining Sequoia Capital as the company’s venture investors.
So what does this mean for CIOs and IT, the custodians of enterprise technology architecture?
It is clear Jive wants to play with the big boys in the enterprise software space. To date, many Jive deployments have not involved IT. This ability to deploy its technology without IT’s involvement has no doubt helped Jive to this point. Of course, having market-leading functionality hasn't hurt. (Jive has featured highly in recent Forrester Wave reports).
At the recent Enterprise 2.0 conference in Boston, I sat down with Jive’s new CEO, Tony Zingale, to explore the company strategy. From our discussion, it was apparent that Jive intends to compete for a big slice of the enterprise collaboration marketplace. Fundamentally, this is the right direction for Jive, but I foresee some big challenges for the company along the way.
In targeting the enterprise collaboration space, Jive moves from being the big fish in a small social technology pond to being the small fish in a much bigger pond. It is jumping into Microsoft and IBM’s pond. As Jive looks to reach into global enterprises to become the content and collaboration platform of choice, it must address architecture concerns that IT will inevitably raise. Jive works well as a standalone social application, but integrating Jive into any established enterprise space could prove challenging. And Microsoft and IBM are not swimming around waiting for Jive to eat their lunch.
Microsoft has already done a major overhaul of Office and SharePoint with Office 2010, building social networking right into the platform (see also the post by Rob Koplowitz: Is SharePoint 2010 Social Ready For Prime Time?). Many of the features I love about Jive's applications are built right into Outlook 2010. When integrated with Unified Communications, some might think the evil empire has built its death star. The huge advantage Microsoft has is its ability to integrate seamlessly into Outlook – still the dominant email platform in the enterprise.
Not to be outdone, IBM has been beefing up Lotus Connections and adopting what I see as a smart strategy: designing the social application components to be embedded alongside other enterprise applications (even those from Microsoft). If it is successful, it will make Connections a major contender in the social enterprise space. (See related posts from colleagues Sheri McLeish and Ted Schadler.)
As mentioned in my post on the Enterprise 2.0 conference, Cisco is also looking to get into the game. And let’s not forget Oracle and SAP. So this is not going to be a slam-dunk for Jive. Winning over IT will be a lot harder than winning over Marketing.
The question many CIOs will be facing is whether they should consider Jive for a collaboration platform. There are certainly cases where Jive fills this role successfully – just this year I wrote a case study on United Business Media, highlighting its success in implementing Jive for enterprise collaboration. Nevertheless, for an enterprise with a heavy investment already in Office/SharePoint or Lotus, the choice is more complex. Many EA teams are just beginning to think of a Social Enterprise Architecture.
To fulfill its potential, Jive must demonstrate its ability to assimilate its platform architecture within the enterprise. Ultimately, Jive’s investors have their eyes on their exit strategy. My guess is that they will attract one of the bigger fish in the enterprise space before an IPO, but they may hold out for the IPO in the hope of getting a higher return. Either way, we might look to see which enterprise vendor is far enough behind the social learning curve to see a Jive acquisition as an economic way to play catch-up.
What do you think? Add your perspective in the comments below . . .
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