Jive CEO Elisa Steele took the stage at the company's JiveWorld conference in Las Vegas today to reassure customers and partners alike following yesterday's announcement of its acquisition by ESW Capital.
The message Steele shared was clear: the company faced some tough choices in the past which drove the decision to sell, but it will continue with its existing strategy in the year ahead.
CEO @elisasteele talking about tough choices @JiveSoftware had to make to get profitable. Glad she's addressing this for anxious customers.— Larry Hawes (@lehawes) May 2, 2017
ESW Capital will buy Jive for a reported $462 million in cash, with plans to fold the software company under its Aurea portfolio of companies when the deal closes, which is expected to take place in June.
But is the sale enough to make the once prominent and lately struggling enterprise collaboration company compete in a growing collaboration software field?
Wait and see, said a number of analysts.
Compete with Big Boys?
"The core issue is whether the acquiring firm will be good steward for a unique company like Jive, an innovator that blazed the trail for the social collaboration industry, but has been struggling in recent years in a crowded industry,” said Dion Hinchcliffe, digital workplace strategist and Chief Strategy Officer for 7Summits, a Jive partner.
Fending off “newly resurgent” players like Microsoft, he added, requires real investment.
“If Aurea is prepared to do that, it may go well,” he said. “Otherwise the risk is that the new firm's DNA won't inherently allow them understand why Jive is an important company in the space, and risks damaging what makes them special."
Jive Software CEO Elisa Steele said it herself, the competition is stiff in a space where Jive climbed to a peak valuation of $1.7 billion in April 2012 but declined to about $400 million at the beginning of May 2015.
“The market we helped create has gotten more and more competitive,” Steele told employees in a letter she sent yesterday. “Big players like Microsoft, Salesforce, Google, Facebook and Amazon are all now pursuing the same market we are.”
Earlier this year marked the first time the company successfully turned a profit since its December 2011 IPO. Jive will be delisted upon the completion of the deal.
A Standalone ESN Provider Among the 'A-Listers'
Jive is already at a disadvantage competitively because it is, “not selling to an A-list company such as Oracle or Microsoft,” according to Tom Petrocelli, a digital workplace analyst who serves as a business analyst for HSBC.
More consolidation emboldens collaboration giants like Microsoft and Cisco, who “will be better positioned to provide workplaces with the tools they need to get the job done,” according to Rob Bellmar, executive vice president of business operations at Omaha, Neb.-based West Unified Communications Services.
“Many of the vendors that folded or became the target of acquisitions didn’t have the resources to address these shortcomings on their own,” he said.
Petrocelli sees hope for Jive given Aurea's focus on specific business problems.
“ESNs have not taken off like expected,” said Petrocelli, who argued the point in his latest column for CMSWire. “They are only relevant when applied to surviving specific business problems. This is what Aurea does."
Good Fit for Aurea
Before Jive overtakes Microsoft, it needs to play well with Aurea.
Some see the potential for Jive to do that inside the Aurea family of companies, which already includes email automation provider Lyris, MessageOne for email management, compliance software provider NextDocs and Spiral for multichannel retail management.
Alan Pelz-Sharpe, founder of Deep Analysis, a consultancy and research firm for technology vendors, said Aurea offers a “complex suite of products” that include CRM and email archiving that, combined with Jive’s enterprise collaboration suite, could work well.
“As we know all too well, customer engagement is more than a great website and campaign management,” Pelz-Sharpe said. “At least I expect Aurea will work to keep the Jive customer base happy and not change things too much. Jive has a complementary customer base so lots of cross and upsell opportunities. Add to this the fact that though Jive is better known today for its internal collaboration capabilities it actually has very good customer community functionality.”
Vanessa DiMauro, CEO of Leader Networks, said the Jive acquisition heralds a new, growing trend: End-to-end, customer-centric ecosystems.
“Based on the other firms in the Aurea portfolio, it appears that Jive is a critical piece of the puzzle,” DiMauro told CMSWire.
She called the acquisition good news for Jive customers because returning private, “will afford Jive the space to innovate more than they have in the recent past due to the reality of never-ended market pressures. I believe we will see a new, exciting Jive emerge from this acquisition in little time.”
David Coleman, founder and manager of Collaborative Strategies, Inc., said Aurea with Jive adds a “long overdue dose of collaboration” for Aurea itself and clients.
“How Jive will fit into Aurea's eclectic product mix will be interesting to see,” Coleman told CMSWire. “Aurea seems to be more of an ERP/CRM and client services company. Many of their clients have probably been asking for a way to support distributed collaboration, and Jive was a relatively inexpensive answer.”
Steele told Jive employees that Aurea sees Jive “as a platform for the kind of employee engagement that ultimately delivers superior customer experiences. In other words, with the Jive acquisition, Aurea is making employee engagement a key pillar of their customer experience vision. And they have belief that with Jive and Aurea together, 1+1 will equal 3 for customers and the market.”
Aurea and Jive share the value that an “operating model focuses on customer success as the path to sustained growth and profitability.”
Aurea, the CEO added, brings a track record of acquiring and growing enterprise software companies with customer success as guiding focus. It currently has 1,500 customers. According to its 2016 annual report, Jive had 981 customers as of Dec. 31.
It’s going to take a lot of work for Jive to catch up to booming collaboration startups like Slack," said Jim Lundy, CEO of Aragon Research.
Jive, a 16-year-old company and one of the early Enterprise 2.0 players, cut 14 percent of its workforce last year and had failed to turn a profit until recently, as Steele pointed out in her letter yesterday.
Jive’s withdrawal of the Jive Chime product earlier this year left it vulnerable to mobile work startups such as Slack, Lundy added.
“Given the unknown track record of ESW and Aurea, the future for Jive is unclear,” Lundy added. “Aurea is relatively unknown in its core space of CRM. Essentially this is a private equity takeout, which is becoming very common in tech. PE firms such as ESW have seen what others have done and want a piece of the action.”
CMSWire Reader Advisory Board member Nancy Goebel, who serves as managing director, membership and strategic partnerships at the Digital Workplace Group, told CMSWire ESW Capital is best known for revitalizing aging software companies.
It’s now “taking on the challenge having just acquired the last of the major Enterprise 2.0 players with a sweet client portfolio.”