Zouk Capital led a Series D round of funding of $51 million for London-based enterprise collaboration platform provider Huddle last week because of its "content-centric collaboration" platform and focus on secure external collaboration rather than cloud storage, sync and share.
Nathan Medlock, partner at London-based Zouk Capital, told CMSWire that Huddle "combines our investment thesis of resource efficiency with best in class technology, a government and enterprise customer base, strong and proven management team and exceptional growth trajectory."
"What we like about the platform itself," Medlock added, "is its focus on secure external collaboration rather than cloud storage, sync and share -- collaboration is where the true value now lies."
But some outsiders are not overly impressed by the Huddle story. Laurence Hart, lead analyst for Word of Pie, called the investment in Huddle "really more of a non-event in the industry."
"There is a lot of thirst by people wanting to invest in the winner of the cloud-based collaboration battles that will be heating up in 2015," he said when contacted by CMSWire. "The issue is whether or not Huddle will be a significant player in a few years."
In June, Huddle earned an enterprise win for its cloud-based collaboration and content management software. It announced then that Williams Lea, which provides specialized business process outsourcing solutions, added Huddle to its suite of online tools for internal and external collaboration.
Hart cited the latest Zouk news, however, as the "first real news from them in some time which doesn't bode well for their prospects."
"Huddle's user experience has traditionally lagged that of their competitors which has hindered their ability to leap ahead of the competition," Hart said. "Time will tell, but for me, this is just another investment round by a tech company. It doesn't herald anything significant other than the fact that Huddle hasn't given up on trying to win."
'Powerful User Base'
But Huddle does have its loyal customer base -- and it's because of its user experience, said Ian Gertler, the CMO of start-up Queue Software of Raleigh, NC. Gertler has been involved with social collaboration software at former companies like IBM and as a technology user.
"The social collaboration space is both fragmented and competitive -- with many features becoming commodities," Gertler said. "Huddle has created a powerful user base of loyal individuals, teams and company-based customers, with early focus on mobile and collaboration. This is one of the core areas that will help them to better compete in the land grab for customers needing these solutions."
The biggest thing, Gertler added, is their user experience "which has propelled a large group of loyal users even in a space where shifting is expected."
"If they can use this money (from Zouk) to key in on expansion of core customer types, like government, they can grow and hopefully reach profitability," he said.
Asked of areas for improvements, Gertler said Huddle could follow the trends -- more focus on content marketing, applied analytics/actionable insight, etc. "There are tons of players in the space," he said, "so I wouldn't be surprised to see more consolidation -- perhaps Huddle acquiring vs. being acquired."
Storage Sync Mere Features
Huddle's recognition that "storage and sync are now simply features in cloud collaboration services" has it heading down the right road, Zouk's Medlock said.
"As cloud storage and file sync and share tools started life in a consumer, freemium market," Medlock said, "value is perceived as very low and getting lower as the market has becomes increasingly commoditized -- think G-Drive, OneDrive, Dropbox and Box."
"Storage and sync are now simply features in cloud collaboration services," he said, "and it's evident that content-centric collaboration is where the true value lies. This is how enterprises and government organizations can transform the way they work and consumer sync and share, and storage tools lack the functionality and security required."
Huddle, Medlock added, is "laser-focused on secure external content-centric collaboration for enterprise and government organizations and doesn't have a freemium or SMB offering."
Huddle meets the needs of enterprise and government organizations that want to transform the way they work by bringing people together in a secure, central environment to work on files from any location, at any time of day on any device, he added.
Where does Zouk see Huddle innovating in 2015?
"In 2015, Huddle will be focusing on intelligent collaboration, analytics and mobile in particular," Medlock said. "The company will continue to expand its footprint in the US and UK and plans to double the size of its London-based product team."
Where's Enterprise Collaboration Headed?
Alan Lepofsky, vice president and principal analyst of Constellation Research, told CMSWire the enterprise collaboration market does not have a dominant set of players the way the email market does in Microsoft, IBM and Google.
"Instead, there are several tiers of vendors fighting for this space," he said. "Some like SAP, Oracle and Salesforce come at collaboration from the enterprise software angle. Others like Cisco, Citrix and Unify try to blend collaboration with real-time unified communication tools. Vendors like Microsoft, IBM, Jive, Igloo, Huddle, Bloomfire, HighQ, Jostle and Thoughtfarmer focus on a community style approach to power intranets and extranets. Adding to the complexity is a new round of startups like Slack and Glip that are getting a lot of attention."
From a feature/function standpoint, Lepofsky said there is not a great deal of differentiation between all these tools.
"The key for success," he said, "is ease of use and integration into people’s workflow, ease of deployment and administration (cloud) and the ability to integrate with other vendors to add additional functionality and industry specific expertise."