Jive IPO Sets Stage for Social Cloud Collaboration Boom
After Jive Software (NASDAQ:JIVE) priced its initial public offering at $12 a share Dec. 12, its shares began trading 27 percent higher the next day at $15.12 per share, and closed that day at $15.05.
The result? At the end of the day, Jive, which had banked some $100 million in funding, was worth $888.9 million based on the company's total outstanding shares.
Jive's public debut won't be confused for social gamer Zynga's later that week, and it certainly won't hold a candle to Facebook's IPO next year. But that's about what you'd expect from a standout in the social-collaboration software sector that has quietly gone about its business.
Jive makes on-premise and cloud-based software platforms that let company employees host online discussions, publish blogs and host polls, share documents and post Twitter-like status updates.
The company also offers social-media monitoring software to help business marketers get a handle on what consumers and rivals are saying about their brands. Jive's 600-plus customers include McAfee, Informatica and Allscripts.
Jive competes with Microsoft (NASDAQ:MSFT) SharePoint, IBM (NYSE:IBM) Lotus Connections, Salesforce.com's (NYSE:CRM) Chatter and dozens of smaller companies in the competitive market for social-collaboration tools.
Jive's IPO is good news for both the long-time tech incumbents and for smaller players, Jive's rivals claimed.
Rob Tarkoff, CEO of social software maker Lithium was among the first Jive rivals to congratulate the company on its public offering. He told eWEEK: "The company's IPO is clear validation that social has gone mainstream for the enterprise. We welcome the competition, and I believe that customers and, ultimately, investors will recognize and reward the strongest players."
Analysts who cover collaboration software are also sanguine about the prospects of the social enterprise.
"The enthusiasm for Jive certainly shows that there are great expectations for the social enterprise," Nucleus Research analyst Rebecca Wettemann told eWEEK. "Beyond the initial buzz, companies will look at how social networking integrates with other infrastructure and applications they have; Salesforce.com still has a leg up there."
IDC research shows that 42 percent of companies in North America are working on some social-collaboration play or something of that ilk, IDC analyst Michael Fausette said. Moreover, Fausette said fund managers and investors he spoke to have a very positive outlook regarding the use of social technologies for business.
Of course, the next logical leap is that Jive's IPO will trigger not only other IPOs, but more market consolidation. Jive wasn't even profitable, yet the market is valuing it at nearly $1 billion.
Lithium's Tarkoff is predicting some industry shakeout in 2012. Fausette agreed, noting that there will be a lot of consolidation in the social enterprise in 2012 as companies lacking compelling social-enterprise tools and strategies grow hungry for some smaller fish.
"Oracle, SAP, Salesforce.com, IBM, Microsoft, etc., will likely buy up many of the better-known social companies to jumpstart their own offerings," Fausette said. Jive, I think, won't be an exception. I should point out that Jive already has a close relationship/partnership with SAP, and there have been rumors that an acquisition has been discussed ... of course, who knows what will happen."
Indeed, and if SAP's $3.4 billion bid for SuccessFactors is any indication, the enterprise software maker is not shy about shelling out for cutting-edge cloud software specialists.
Jive, with its proven technology and customer base, may get acquired yet, despite the existence of hundreds of smaller, cheaper players. To wit, keep an eye on Lithium, NewsGator, GetSatisfaction, Igloo, Yammer and other Jive rivals that could get acquired before going public.