Jive Talks Itself into $15 Million in Funding

The collaboration software startup pockets an investment as it seeks to better compete with Microsoft and IBM

Jive Software, a startup with designs on competing against IBM and Microsoft in the burgeoning market for business collaboration software, is priming for a new growth spurt.

The company, based in Portland, Ore., has 2,000 customers, including Apple, Nokia, Deloitte & Touche and Delta Airlines. Jive plans to announce on August 29 that it has received $15 million in funding from Sequoia Capital.

Jive Software CEO Dave Hersh told eWEEK that the cash will be put primarily toward product development, but will also be used to broaden sales and marketing efforts for its flagship Clearspace and Clearspace X applications.

Clearspace, intended to compete with Microsofts SharePoint suite and IBMs Connections software, is a collaboration application that lets knowledge workers employ content creation tools, including blogs and wikis, to do work. Users can then discuss their work in a forum.

The Java-based application does this from a single interface and features a ratings system, user rewards, tagging, workflow and RSS (Real Simple Syndication) feeds. Clearspace X is a version of Clearspace designed for collaboration with external customers, partners and suppliers.

Hersh said that while Clearspace can be considered a rival to SharePoint, the two products can also co-exist because the products let users achieve their collaboration goals in a different way.

For example, Clearspace helps workers get work done with a community approach, with the output being documents. SharePoint has a file-centric focus and starts with documents from the outset, and users get to conduct their workflow. Theoretically, Clearspace can sit atop SharePoint in a network.

"Theres a lot of companies that prefer SharePoint integration or SharePoint as a system of record for documents and Clearspace sits on top of that to do the social productivity—conversations, wikis and blogs," Hersh said. "But in some cases, they choose to use Clearspace for all of it."

Jive wasnt always so unified. Hersh noted that the company started with a slew of point solutions, including the Ignite discussion forums software, Openfire real-time collaboration server and Spark instant messaging client. But companies eventually complained that their software systems were a tangled mess of one-off wikis and blogs.

"They said, Can you please give us something besides SharePoint to accommodate the needs of these lightweight, Web 2.0 collaboration spaces, but do it in a way that is IT and management friendly? They were asking us for wikis, blogs, discussion threads, tags and document management all in one system," Hersh said.

Thus was born Clearspace and with it, the heightened awareness that Jive was providing value. Burton Group analyst Mike Gotta said Clearspace put Jive into the "tweener space," where the company is more inclusive than one-off blogging specialists from Movable Type or WordPress but not as comprehensive as "super platforms," from Microsoft and IBM.

"Jive has moved out of the point product realm," Gotta said. "Something is coalescing in terms of a platform play, but not quite to the extent that Microsoft and IBM have."


Click here to read more about SharePoint as an enterprise application.

Gotta said Jive has work to do to get there. For example, while Clearspace has author-side tagging it does not have user-side tagging. Moreover, the company needs to build out its brand recognition and channel, Gotta said.

Sequoia Capitals investment round should help, but is also likely a sound play given that analysts claim business collaboration is a multi-billion-dollar market.

Gilbane Group analyst Geoff Bock said he was not surprised Jive secured funding because "this whole area of a shared workspace is just exploding."

"To my way of thinking, the expansion of the shared workspace area is going to be on the same order of what happened when the Internet and the Web took off in the late 90s," Bock said.

Bock also said the fact that Jive is Java-based makes a difference because not everyone wants to build on a Windows platform or just on an IBM Java platform.

To that end, Hersh said Jive, which employs 63 people, saw a 95 percent increase in quarter-over-quarter sales in the second quarter of 2007. Moreover, the company is projecting $15 million in sales through 2007 and expects to double that revenue total through 2008.

"We didnt need to raise money, but the point is that the money allows us to be that much more aggressive about maximizing the market opportunity, which we believe is a huge one," Hersh said.


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