Shock Jive sale shakes up ESN market – again

This week saw another twist in the tale of Enterprise Social Network (ESN) vendor Jive, with the sale of their external communities product, Jive-x, to social media management vendor Lithium.

This comes just three months after Jive were acquired by Aurea, the customer-centric software house owned by private equity firm ESW Capital.

And the sale comes just weeks after Lithium were themselves acquired by a different private equity firm, Vista Equity Partners.

Confused? So are we.

The sale

Jive has two core products, Jive-n, the enterprise social collaboration platform, and Jive-x, which supports external customer communities. The two products share many common elements and have a common user experience. In a surprise move, this sale decouples the two, with just the Jive-x external communities business being sold.

The buyer

Lithium specialise in social media customer service and marketing, so on the face of it adding customer communities to their portfolio makes sense. Jive have a good client list; adding the likes of T-Mobile, Tableau and Akamai to their portfolio offers potential for a steady revenue stream for Lithium, as well as cross-selling opportunities for their social media tools.

It’s easier to understand why Lithium have bought, than it is to understand why Aurea have sold.  

When Jive were acquired back in May, we reported Aurea were positioned firmly in the external B2B market. Acquiring the Jive suite created opportunities for synergy between Jive’s customer engagement tool, Jive-x, and Aurea’s retail and CRM products, leaving the internal-facing Jive-n product as the odd man out.

In a memo to employees at the time of the sale, Jive CEO Eliza Steele gave assurances the future of Jive was safe:

“Aurea’s interest in Jive is both strategic and operational… with the Jive acquisition, Aurea is making employee engagement a key pillar of their customer experience vision… the Aurea team plans to spend a lot of time getting a fuller understanding of our organization and how to bring the companies together in a way that will ensure customer success… As things become clear, you will hear from the Aurea team about their vision for the combined company and their plan for the future. The most likely time frame for that will be sometime in Q3 2017.”

As such the sale of Jive-x just months later raises the question of whether Aurea have decided against making Jive part of their software roadmap and have instead looked at how the investment can be recouped through selling the company’s assets.

It’s not clear what Lithium have paid for Jive-x, nor precisely what they are getting for their money.

What’s next for Jive?

It’s hard to see how this is good news for the rest of the product. Jive-x and Jive-n have, to date, been two sides of the same coin, sharing a tech stack, development and operational costs, while creating spaces for collaboration to span the firewall and, in turn, the potential for extension business.

Without the external product, Jive-n increases its costs and reduces its potential revenue. It’s like Adobe selling Illustrator but keeping Photoshop.

If we were a customer using Jive for intranet and ESN we’d be very worried right now. Multi-million dollar digital workplace investments require the confidence that comes with stable ownership. This latest sale creates uncertainty: no clear roadmap and no certainty that Jive-x as we know it will be around long enough for a company to realise their investment. Would you buy a car without knowing that the car manufacturer will be around to fix it?

It was Jive’s highly customisable ESN product that attracted customers in the first place. This move suggests internal communities are to be further integrated into Aurea’s software-at-scale stable. Previously happy customers have been taking to Twitter to express their frustration at the Jive product’s loss of focus for some months now, and further reducing Jive’s footprint is unlikely to allay their concerns.

The market

The enterprise market has certainly heated up over the past couple of years. With the arrival of Slack and Facebook on the scene, and now Amazon vying for a piece of the pie, Jive-n customers will find no shortage of competitors looking for their business.

And yet many find themselves disappointed by the alternatives. Slack has not yet cracked the scaling challenge to support large enterprises, and while Facebook’s Workplace supports conversation, it lags behind Jive’s capabilities for deep collaboration through a value chain and lack expertise in making ESNs work in matrixed organisations. Few of Jive’s complex multinational customers will find either an adequate replacement.

The winner in all this is Microsoft, who can offer deep collaboration capability along with the ability to fine-tune security and permissioning which is essential in larger firms and regulated industries.

Many of Jive’s customers migrated to them from SharePoint looking for improved usability. We predict these will find themselves coming a full circle within a year or two, particularly given predicted announcements at next month’s Microsoft Ignite event.

And with LinkedIn now part of the Microsoft stable, this ironically leaves the Redmond behemoth well positioned to serve hybrid internal-external communities too.

Are you a Jive customer? What are your plans for your Jive ESN? Let us know in the comments below.