Acquisition news fuels uncertainty at JiveWorld 17

COMMENTARY
 
Six years after its IPO, social collaboration vendor Jive Software is to be acquired by ESW Capital for $462m. While there has long been speculation that an acquisition was on the cards, the news has certainly overshadowed Jive’s customer conference this week, and will undoubtedly leave many customers and prospects wondering what’s ahead.

A new home for Jive

It’s been a rollercoaster week for Jive Software. On Monday – on the eve of its annual customer and partner event, JiveWorld – the company announced it was to be acquired by ESW Capital, the owner of customer experience vendor Aurea and a serial acquirer of technology companies, for $462 million. Approved by Jive’s board, and expected to close by the end of June, the move will see Jive become part of the Aurea family, most likely falling into its customer engagement division, alongside CRM and email marketing.

It was interesting timing for the announcement; while it provided customers, partners and analysts with the welcome opportunity to speak to Jive execs (and also Aurea’s CEO Scott Brighton, who was invited to take part in the opening day keynote) in person about what the acquisition would mean for Jive and its future, in practice the news is too new to allow for either party to have concrete answers for people’s concerns, and it’s had the unfortunate side-effect of taking the attention away from the other news and announcements from the conference. It’s also led to questions about whether we will see another JiveWorld next year; the dates have been announced, but we’ve yet to see whether it will actually happen and, if it does, what form it will take.

JiveWorld product news – AWS, identity, intelligence

Acquisition aside, this year’s JiveWorld has seen the management team sharing their progress and plans as the company works to rediscover itself in a challenging and competitive space. Though somewhat underplayed in the scheme of the keynote announcements, perhaps the biggest news was that Jive is moving to AWS for its cloud hosting, bringing added scalability, security, resilience and redundancy to its newly rearchitected platform, and giving the company the opportunity to take advantage of underlying features like its Elasticsearch. The move also means Jive will be able to shift to a more regular release cycle, with releases every few weeks rather than the three per year it currently works to.  Jive will start migrating customers to the new architecture at the start of Q3, and plans to complete the process by the end of the year.

One area Jive has been investing strongly in over the last year or so is the issue of identity, and unifying its two offerings – Jive-n for internal deployments, and Jive-x for external communities – in more practical ways. Last year Jive introduced the concept of being a hub for collaboration, and this year the company announced several new capabilities that will ship in Q4, including a new identity service that will allow Jive customers with both internal and external communities to work more seamlessly between them, with a unified inbox, universal search and a single admin environment. The search capabilities will also extend to content shared in Jive from other applications, enabling this content to also be available to the recommendation engine within the platform.

Another key theme in Jive’s roadmap is network intelligence and analytics, leveraging the information about what individuals are doing on the platform to drive the user experience and recommend potential actions. Underpinned by Jive Identity, the new Jive WorkGraph will capture signals from both your internal and external communities to drive recommendations, and in 2018 Jive plans to release a new, Organisational Network Analysis-based capability which will leverage this information to help managers assemble the best team to carry out a particular project, based on people’s skills and relationships, for example.

From an industry solutions perspective, the company is adding to its existing offering for Healthcare, Government and Financial Services with Jive for Regulated Industries which will be available in Q3 (adding FedRAMP certification in Q4).

As usual for JiveWorld, we heard from lots of customers – both in the keynote sessions and in the breakouts – with lots of new brands (such as CommVault, Cleveland Clinic, Cox Automotive and Western Digital) alongside familiar faces (such as Pearson, Akamai and Humana). I was particularly interested to see a growing trend of customers applying Jive to learning and development use cases – University of Chicago Graham School and CommVault  shared stories in a focused learning and develop track on day 2, and I think there’s quite an opportunity for Jive in this space. I also had a great conversation with LMS vendor Instructure, which is using Jive to support an ideation community for its customers.

Once again, I was struck by the level of engagement and enthusiasm among the Jive customers present – they truly value the connections they make at JiveWorld, and embrace the opportunity to share their adoption experiences, successes and challenges, and personally I haven’t come across another vendor conference with the same community feel to it. However, it’s true that the acquisition threw a shadow over the event – there was lots of concern among attendees as to what the news would mean for them going forward, and the impact on their relationships with Jive.

What’s behind the acquisition?

As someone who has been tracking Jive for several years, I have been waiting to see if and when Jive would be acquired. It is the last major independent specialist in the enterprise social networking / social collaboration space (its peers like Yammer, Telligent, Socialcast and Socialtext have all been acquired over the last few years), and Jive has played a huge role in defining and popularising this area of the software market.

But the reality is that things have been getting gradually harder for Jive and its competitors. The hype bubble surrounding enterprise social networks and social collaboration has burst, with Slack leading the charge as a new type of collaboration technology grabs the headline news. But it’s about more than just market fads; the problem is that successfully driving adoption of social collaboration is hard (as is any initiative that aims to bring about change to the organisational culture). Once the market hype has faded, you’re left with the starkness of the challenges of making it work, and once you’ve exhausted the early adopter opportunity, it’s a much harder sell.

After initial rapid growth,  since its IPO in 2011 Jive has been struggling to maintain growth momentum and make a profit (it finally did so last year following a dramatic restructuring of the business), and  was ripe for acquisition. On the face of it, Aurea’s software portfolio is a good fit for the Jive technology – it’s easy to see how the external communities piece will fit in the context of Aurea’s customer experience and engagement offerings; but the role of the internal, employee engagement piece (where Jive has been strongest) is less obvious. Aurea’s reputation for radical restructuring, particularly in engineering and product roles, is also a cause for concern if Jive is aiming to introduce significant new technology capabilities to the platform.

We won’t know more detail until the deal closes, but whatever happens, we can expect to see Jive’s competitors seeking to take advantage of the uncertainty – particularly among prospects.

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