Jive Software Goes Private – Future Is Unclear
By Jim Lundy
(Aragon Research) – In a surprise move, Jive Software announced it was being purchased for US $462 Million, by a firm that is owned by Private Equity firm ESW Capital, which is based in Austin, Texas.
ESW indicated that Jive would become part of Auera Software, a relatively unknown CRM provider. The deal, which is just under 2x Jive’s Revenues, signals the beginning of the end of the Enterprise Social Software era. This blog discusses a few aspects of the deal.
Who Is Auera Software?
Auera Software is a relatively unknown CRM provider based in Austin, Texas. Auera has been in business since 2012 and should essentially be looked at as a small startup. The CEO of Aurea, Scott Brighton, is here at the JiveWorld17 Conference meeting with customers and partners. We expect him to be on stage today.
Based on the Auera Website, Jive would be the tenth firm that is being merged into Auera. Their core CRM offering was based a European CRM firm they acquired called Update. Our take is that it is rare to see a software firm made up entirely of acquisitions. It can take years to integrate products.
Auera is also competing in multiple verticals, such as Retail, Insurance, and Life Sciences. Each of those markets has unique challenges, particularly for a young firm like Auera.
Yammer Sold First; Jive Waited
In a flashback tweet yesterday, I stated that Yammer was sold to Microsoft in 2012 for US $1.2 Billion. While Yammer got a much better multiple, they sold at the peak of interest in ESN. Jive, which went Public in December 2011 and had an initial value of over $700 Million, waited too long. The deal is good for Jive Investors, but the jury is out if it is a good move for Jive Customers. All in all, we think ESW outbid other better known providers to get Jive.
The Future of Jive Is Unclear
For those that don’t know Jive, they have two key offerings: Jive-n, their Social Intranet, and Jive-x, their Customer Community offering. To us, given Auera’s focus on Customer Experience, we would expect Jive-x to be a natural part of the portfolio. For Jive-n, the future is unclear, in part because the world has gone Mobile and newer offerings, such as Workplace by Facebook and Slack, are offering newer and faster ways to work.
We are monitoring this situation and will have more analysis as more details unfold. The challenge for customers is that often, firms that go private make promises and then don’t deliver. The best way to deal with situations like this is to have an exit strategy in case things don’t continue as promised.