NewsGator Acquires Tomoye: Expands Solution Offering, Markets
One of the most well-known SharePoint-based social computing vendors, NewsGator (news, site) has just announced an acquisition deal with Tomoye (news, site) that expands their solution offering and markets, and could just put them above the rest for an end-to-end Enterprise 2.0 platform.

The financial details of this acquisition are, of course, not disclosed. But it's not the financials that interest us anyway. It's the market expansion and the new solution additions to NewsGator that will make a difference.

CMSWire spoke with NewsGator CEO J.B. Holston and Tomoye CEO Eric Sauve on the acquisition and what it means for both companies.

Expanding Markets Via Acquisition

NewsGator has over 2.1 million paid subscribers to their social computing solutions. Most of these are in the private sector and are intranet based.

Tomoye, on the other hand, has a little of 50 customers averaging 500,000 seats under maintenance. Over 75% of these are government, including the US Army with 150,000 users.

While the government sector is a market NewsGator hasn't historically approached, it is a market they see much opportunity with. Holston told us the 97% of federal seats in the US have SharePoint licenses -- that's roughly 5 million users.

Bringing Tomoye on board provides the ability to cross sell NewsGator offerings to a ready market.

Expanding Across the Enterprise

NewsGator Social Sites is an intranet based solution. Built on SharePoint 2007, it provides a number of out of the box capabilities to support internal social computing and networking. The latest release was at the end of September and added microblogging to the list of features.

Tomoye Ecco is a community solution, loosely built on WSS (Windows SharePoint Services) and is focused more on the extranet or external communities. The latest release of Tomoye was demoed at the Enterprise 2.0 conference in June of last year, but was officially released last October. You can get a version of Ecco that doesn't require WSS at all, completely removing the SharePoint element.

Two different solutions, built for two different markets with one common denominator: SharePoint. Is that enough to make this new set of offerings work together? Likely.

Learning Opportunities

As both Holston and Sauve describe it there are some nice out of the box integration stories to be told here. 

  • The Enterprise 2.0 adoption cycle: Many customers like to start out with WSS to test the SharePoint waters. Tomoye is based on WSS and thus enables customers to leverage what SharePoint offers without much investment. But as their experience matures and they want to leverage SharePoint for even greater capabilities, they can add NewsGator Social Sites to the mix, taking their social computing from external communities to the internal environment.
  • Extending the Enterprise: In many cases, a client who has Social Sites installed is ready to take the next step and move to external communities. But, there are security concerns related to SharePoint. Tomoye plugs that security hole (because it can run without SharePoint) while offering the community capabilities that can be integrated with Social Sites.

The integration that you would see out of the box between NewsGator and Tomoye comes via NewsGator's RSS Enterprise Server. We may see additional integration scenarios as time goes on, but don't expect to see the two solutions completely combined.

Going forward, although Tompye Ecco may (likely will) be renamed, it will still remain a separate solution from Social Sites because it serves a different set of use cases and a different audience. And as a result, existing customers will continue to receive the same support as they do today.

Social Computing in 2010

NewsGator has a lot of competition in the social computing market, particularly when it comes to the enterprise. Jive Software, Telligent, Awareness, SocialText, MindTouch, SharePoint, and many, many others are all out there vying for the same enterprises.

With the acquisition of Tomoye, NewsGator has bought itself a captive market in the government sector. One that could bring them a lot of business. And if the usage numbers are correct in recent Saba//HCI research, there's definitely opportunity there.

And it goes without saying that ties to SharePoint can take NewsGator a long way. But they can also now go even longer with a non-SharePoint offering in Ecco.

There are a lot of acquisitions and changes starting to happen in the social computing/social software space. It will be interesting to see what the reaction to this acquisition is and if there are more of the same on the horizon.