Feature

Lithium Technologies Acquires Jive Software's External Community Business

5 minute read
Dom Nicastro avatar

It didn't take long for ESW Capital to break up Jive Software.

ESW Capital announced plans to sell Jive's external community business, Jive-x, to Lithium Technologies just shy of four months after the private equity firm acquired Jive, company officials announced today. Terms of the deal were not disclosed.

ESW Capital bought Jive in May for a reported $462 million in cash and folded the software company under its Aurea portfolio of companies.

Company officials said today's deal allows Jive to focus on its intranet solution while boosting Lithium's footprint in online communities. San Francisco-based Lithium offers social media management solutions and online community products. 

2 Jive Acquisitions in 4 Months

So this makes two Jive acquisitions in four months. Granted, it isn't the whole company, but it does raise the question:

Where is the once red-hot enterprise social network provider and its customers going now?

Will the Lithium-Jive combination create an online community superpower? The two companies were once fierce competitors in the online community space, duking it out for leaderboard space in Forrester and Gartner industry vendor-ranking reports.

But Jive went south, at least in valuation — from a high-water mark of $1.7 billion in 2012 to below $500 million three years later. Jive entered into an IPO in 2011 and earlier this year turned a profit for the first time since its public offering.

The company had been entertaining a buyout for some time.

Today's buyout of the external community business certainly impressed — or at least shocked — some:

Splitting Jive in Two

None of the industry analysts who spoke with CMSWire after the ESW acquisition predicted a second acquisition for Jive. 

Aurea's previous acquisitions, including its purchase of email marketing provider Lyris software in May 2016, placed it firmly in the realm of customer experience — an odd match for an enterprise collaboration player.

Some thought Aurea-Jive could be a good deal. Aurea offers a “complex suite of products” that include CRM and email archiving that, combined with Jive’s enterprise collaboration suite, could work well, Alan Pelz-Sharpe of Deep Analysis told us then. 

And that potential still exists: the Jive-n intranet platform remains under the umbrella of Aurea and ESW. 

“We believe all Jive customers will benefit from this transaction through increased focus on their distinct needs," Scott Brighton, CEO of Aurea, said in a statement. "Jive-x customers will enjoy Lithium’s exclusive focus on external communities, while Jive-n customers will benefit as we intensify focus on serving as the gateway to an enterprise’s most important assets — its knowledge and people. Jive will deepen its commitment to creating true enterprise-wide collaboration in an increasingly complex, fractured and global business environment."

Lithium, Now the 'Go-To Shop' for Customer Communities

Lithium made a big move in 2014 when it acquired social media ranking platform Klout. And this move with Jive cements Lithium as the "go-to shop for anyone building a customer community," Rachel Happe, principal and co-founder of The Community Roundtable, told CMSWire about the deal today.

Carrie Basham Young, Talk Social to Me founder and a CMSWire Reader Advisory Board member, told CMSWire today that it was made clear during the May Jive acquisition that Aurea's strategy was focusing on internal communities. 

"So," she said, "the sale of the Jive-x (external communities) product comes as no surprise."

Learning Opportunities

"However," Basham Young added, "this is also a signal that Jive-n is being further integrated into Aurea's kitchen-sink software approach. Customers who relied on Jive's strong customer success team and highly customizable internal communities may soon find themselves being integrated into a commoditized, 'take-a-number' program that better fits into Aurea's model at scale."

Jive-x Still Alive

Rob Tarkoff, president and CEO of Lithium, said Lithium and Jive have been "forward thinking in the digital customer experience market for many years."

"Bringing Jive-x customers into the Lithium portfolio," he added, "will give these customers access to our cumulative knowledge and the best innovation of both products, delivering significant business value for all."

Tarkoff said his focus will be on "ensuring continuity of service for all Jive-x customers." Lithium still plans to offer the Jive-x solution but now offers a "broader set of community features," according to company officials.

Specific details will be communicated directly to both Jive-x and Lithium customers.

"We believe," Tarkoff said, "that all customers will benefit from our continued investment into the community product category and enhanced access to integrated social media management capabilities over time."

The deal is subject to customary closing conditions, including regulatory approvals.

DNN Corp. Joins ESW

The Jive deal wasn't the only one for ESW Capital this week. 

In other news, the private equity firm acquired San Mateo, Calif.-based web content management provider DNN Corp. yesterday. ESW plans to "further invest in the CMS platform as well as the DNN open source ecosystem," according to officials.

"Together with the open source community, DNN Corp. has over a decade of experience enabling customers to be successful in managing their digital content," said Andy Tryba, the new CEO of DNN Corp. "As mid-market firms continue to invest in content growth strategies, DNN's simple, cost-effective and extensible CMS platform is now mission critical." 

Departing DNN CEO Navin Nagiah had been in the role almost nine years. His next role is unclear at this time. "We are incredibly proud of having served both customers and community for over a decade," Nagiah said in a statement.

DNN's Evoq 9, the latest iteration of DNN’s web content management suite released in Dec. 2016, moved the platform from monolithic to decoupled, delivering publishing via a microservices architecture.