Yammer Bangs On oneDrum

This entry was cross-posted from Meanders: The Dow Brook Blog.

Yammer announced on Wednesday that it has acquired oneDrum, a UK-based provider of file sharing and collaborative editing tools for Microsoft Office users. Financial details of the acquisition were not disclosed. oneDrum’s technology and people will be integrated into Yammer.

In a briefing on the acquisition, Yammer CTO and Co-Founder, Adam Pisoni, stated that the deal was done to quickly accelerate movement toward Yammer’s primary strategic objective – to be the social layer, spanning key enterprise applications, in which its customers (and their extended business networks) get work done.

Yammer’s action is consistent with its strategy to release usable, but not ideal, functionality and then improve upon it as quickly as possible. Yammer introduced the homegrown Files component into its suite late last year. With oneDrum’s technology, Yammer will be able to improve its Files component by enabling syncing of files to desktop folders and mobile devices, as well as automatic sharing of new and updated files with other members of Yammer groups. As usual, Yammer seeks to occupy the middle ground, offering file sharing functionality that has some of the necessary enterprise-grade security and manageability that consumer Web services lack, while retaining as much ease-of-use as possible. Yammer’s ability to balance complexity and usability is what differentiates it from the majority of the other enterprise social software offerings in the market.

The current file creation and editing capabilities available in the Pages component of Yammer will be nicely complemented by the introduction of oneDrum’s ability to co-create and co-edit Office files (Excel and PowerPoint now, Word in development) with others. Many may interpret the addition of this capability, together with the added file sync and sharing functionality, as an indirect attack on Microsoft SharePoint by Yammer. Pisoni clearly stated that Yammer will continue to offer customers integrations with SharePoint, as well as with Box, Dropbox and other content repositories. He did, however, acknowledge that while Yammer is not intentionally targeting SharePoint, many of its customers see their Yammer networks negating existing SharePoint use cases.

Yammer’s real target appears to be email, which offers a single place where people may communicate, share content and get work done. Pisoni spoke about the symbiotic relationship between content and conversation in social networks, as well as the blurring line between content and communication. The former is clearly demonstrated by the frequency in which enterprise (and consumer) social interactions are anchored around a specific piece of content, whether that be a traditional document, blog post, wiki entry, status update, audio snippet, photo or video. The latter is evidenced by the growing enterprise use of blog posts, wiki entries and, especially, status updates to share content (and explicit knowledge) in small chunks, rather than waiting to gather it in a document that is distributed by email.

Pisoni’s assertion that the distinction between content and communication is blurring is interesting, but less persuasive. Much of the asynchronous communication within organizations is still only secondary to the content that is contained in attached (or linked) files. Corporate email use as a transmission mechanism for documents is a clear, common example. Yammer’s vision for decreasing email volume appears to involve using oneDrum’s support for real-time chat between individuals working together in an Office document (Excel and PowerPoint only at present) as a means to blend content and communication to help people get work done faster. It will be interesting to see if Yammer network members adopt this envisioned way of working as an alternative to entrenched communication and content sharing norms.

oneDrum was not well known in the U.S., as it was a very small vendor with a beta status offering. However, it appears that Yammer has made a good acquisition that will help the company, and its customers, address the changing nature of business organizations and work. The devil, of course, is in the details, so we will have to watch and see how well Yammer assimilates its first acquired company.

Telligent Gains Leverage on Its Cloud and Mobile Roadmaps

Telligent Systems, Inc. announced on Monday that it had acquired Leverage Software, a competing provider of enterprise social capabilities used to support communities and customer relationship management efforts (see press release). The deal closed at around 10:00am CST, after about two months of discussions and paperwork, according to Telligent’s Founder and CTO, Rob Howard, and Wendy Gibson, Telligent’s CMO. Leverage’s brand and people will be integrated into Telligent starting immediately, and technology integration will occur some time in 2012.

At first glance, this seemed like a straight-forward acquisition with a clear purpose. That initial impression was validated upon speaking with Howard and Gibson shortly after the news broke. Telligent gains several strategic pieces that will strengthen its offerings through the acquisition of Leverage, including cloud, mobile, and analytics technology; people with .NET and iOS development skills; and some marquee customers.

The single largest impact of the acquisition will be an accelerated delivery of Telligent’s cloud offerings roadmap. Telligent Community is available today in a hosted, single-tenant version only. Leverage Software’s platform was built on a multi-tenant SaaS architecture in 2003, so they have extensive experience in the cloud. Both vendor’s products and services are built on .NET and other Microsoft technologies, which should ease the transformation of Telligent Community (and, most likely, Enterprise) to a multi-tenant architecture. Additionally, the rich API set of Telligent’s Evolution platform should speed the integration of the vendors’ offerings in the near term. When asked, Howard noted that Telligent will continue its existing, early-stage efforts to build and deliver functionality on Microsoft’s Azure infrastructure.

Telligent’s mobile capabilities will also receive a boost from the Leverage Software acquisition. Leverage has developed an iOS-native version of Leverage Community, which is sold through Apple’s iTunes Store. Earlier this year, Telligent introduced tools in its Evolution platform that extend Telligent Community and Telligent Enterprise to Apple’s iPhone, as well as Blackberry and Android devices. However, Telligent does not offer device-specific versions of its products. With their experience, Leverage’s developers should be able to change that fairly quickly, at least for iPhone and iPad. Telligent has previously discussed plans to build HTML5-compliant versions of its community applications as well.

Leverage Software claims to support 250 communities, with 15% of the Fortune 100 as customers. Well-known brands such as The Home Depot, Pearson, and Wells Fargo have demonstrated the scalability and effectiveness of Leverage’s technology. Telligent’s Gibson remarked that they are very pleased to be adding Leverage’s customers to their portfolio and that they would begin on-boarding them soon after the brands have been united.

Unlike some of its more marketing driven competitors, Telligent has grown its business the old-fashioned way, by quietly delivering a platform and applications that have helped customers meet well-defined, community-centric business objectives. The company has a loyal and highly enthusiastic customer base. Now, with the acquired assets of Leverage Software, Telligent is poised to accelerate its growth, as well as the success of its customers and their internal and external communities.

One other thing has been accelerated as a result of this acquisition – the consolidation of the Enterprise Social Software market. It will be interesting to watch Telligent in 2012, as it will likely make other acquisitions in order to offer additional functionality on its platform. Telligent would also be an attractive acquisition for a larger vendor seeking an extensible, Microsoft-centric enterprise social software platform. Either way, next year will be an interesting one for Telligent and its customers.

This entry was cross-posted from Meanders: The Dow Brook Blog. Telligent Systems, Inc. is a Dow Brook Advisory Services client.

Is the Acquisition of Jive Software Imminent?

Jive Software’s future has been a topic of discussion after Tony Zingale was appointed interim CEO in late February. Recently, there has been speculation that the company will be acquired soon. Those rumors escalated last Tuesday, when Jive appointed Zingale as its permanent CEO, just 3 months after giving him the title on a temporary basis. But do the rumors of an imminent sale of Jive have any validity? Let’s examine the facts.

Yes, Zingale orchestrated the acquisitions of the last two companies of which he was CEO. In 1999, he was CEO of Clarify when it was acquired by Nortel and, in 2006, he presided over the sale of Mercury Interactive to Hewlett-Packard. Given that past experience, there is a chance that he could engineer the sale of Jive in fairly short order. However, it is noteworthy that Zingale was CEO of Mercury for over 2 years before HP bought it and led Clarify for 3 years prior to its acquisition. This tells me that it is unlikely that Zingale would be able to intentionally sell Jive in his first year as CEO. More time would be needed to get the company’s operating metrics (revenue, profitability, etc.) to where they would need to be to drive a significant acquisition price.

When you factor in Zingale’s 9-year stint as SVP Worldwide Marketing at Cadence Design, the explosive growth that both Mercury and Clarify attained under his leadership, and the fact that he has already invested 2 years in growing Jive as a member of its Board of Directors, it becomes clearer that his experience in building companies is at least as strong as, if not greater than, his proven ability to engineer their purchases. Therefore, I see no conclusive signal in Zingale’s appointment as permanent CEO that he is being given that role to lead the sale of Jive.

Jive also announced on Tuesday that it is moving its headquarters from Portland, OR to Palo Alto, CA. Some immediately interpreted the move to Silicon Valley as an attempt to facilitate the sale of the company by being in the middle of the deal flow. While that is possible, I do not see any hard evidence to support the conclusion. In fact, it is just as likely that Jive is moving to the Valley to enhance its ability to acquire companies as it is that the move is intended to ease its sale. Most importantly, Jive has had some members of its executive team in Palo Alto for several months prior to Zingale’s appointment as temporary CEO, including CMO Ben Kiker and Sr. VP of Products Christopher Morace. Co-Founder Bill Lynch told me last Thursday that Jive had identified the need to expand operations in Palo Alto a year and a half ago. The formal consolidation of Jive’s leadership in Palo Alto simply makes good sense from an operating perspective at this point.

Zingale’s revelation that he would like to grow Jive to a $100M business by the end of this year, and put the company in position for an early 2011 initial public offering, has also fed the acquisition rumor mill. Supposedly, the game is to announce the intent to IPO in order to spur an acquirer into action now. That might work, but as SuccessFactors CFO Bruce Felt pointed out at Altitude2010 last week, there are many benefits to be gained by getting to an IPO as quickly as possible. Chief among those, according to Felt: credibility. That is an attribute sought by an organization that is in it for the long haul, not one that is positioning to sell.

For now, I believe that Zingale is taking a “Built To Last” approach to running Jive Software. That does not mean that he would not sell the company tomorrow if an exceptional offer were made; Bill Lynch admitted as much to me when we spoke. I am not, however, ready to jump to the conclusion that the sale of Jive is imminent, at least not based on the evidence I see now.