Opinion: My Quick Take on Jive’s Acquisition

Monday Jive Software (see disclaimer below, we have history) announced it entered a definitive agreement to be acquired by ESW Capital, LLC – a private equity firm.  Details for the deal can be found here (I link to a couple of interesting writeups throughout, people I like and ask the right questions).

There are three things that come to mind with this deal.

  1. As David F Carr says here, no surprise that it was acquired.  After several quarters of poor performance (celebrating a single digit growth for the year in 2016 was the lowest part of it IMO), the inability to sell the company to someone in the industry that could do something useful with the product, and a demoralizing campaign that broke the spirit of most employees I talked to – management finally managed to do something they have been trying to do for over 2 years.  Make no mistake, in spite of $462 million seemingly being a lot of money – it is nothing compared to what some others were prepared to offer in past years (I cannot offer data, I am compromised by NDAs – but I have no reason to lie at this point) but were unable to close during due diligence.  What is my point? I am glad that this management team is not going to be calling the shots anymore.  An utter lack of vision, a focus on menial details that provided no value, and no purpose highlighted the last two years of the company’s performance.
  2. The product people rock.  It is well accepted and well known in the industry that the two things that clearly worked at Jive lately were product and professional services.  Back in the day when they migrated from on-premises to cloud (between versions 3.0 and 6.0), they showed the direction the product was aiming for.  The last two years, although compromised by the release of inane little apps that added no value, was a continuation of that – ending in the announcement at JiveWorld17 of their migration to AWS by the end of the year (among other improvements that should be celebrated).  Well done, and as long as Aurea (the new overlords) don’t compromise the integrity of that move it assures customers that Jive will be around for a while – with better performance, and better solutions to come.  I see this move as beneficial for the product, as long as their Head of Product, Ofer Ben-David – a brilliant technologist, remains with the new company.
  3. Communities are the future.  I have been supporting Jive since the days of the migration to cloud as the logical choice to offer the ad-hoc community platform that all enterprises need to have going forward.  Despite the best efforts from Lithium to catch up (and the great run lately of converting many Jive clients to Lithium clients – driven by the management team actions at Jive as well as the clear leadership of the Lithium management team) I still believe Jive’s product is better (if you take out some of the bells and whistles added the last two years for no reason) and Aurea, if they leave the product alone, will greatly benefit from it.  The model that Jive can deploy for communities (both internal and external) now that they reside on AWS requires some evangelism but it’s a clear winner.  Time will tell if the new overlords leave them alone, if Ofer Ben-David stays, and if the current product is not dismantled for parts (as it happens in many PE acquisitions; if the course stays, Jive has a good chance of powering the future of communities.

Of course, there are many issues remaining, and Derek Du Preez does a good job over at Diginomica positioning those questions, but I am hopeful that this deal will let the product shine for its goodness and remove the bad people from the decision-making of where the product should go.

What are your thoughts?

disclaimer: Jive was a client and a partner for a long time.  I started working with them in 2009 and remember the revolving door that saw 4 CMOS within a year, the run to the IPO, the beginning of the battle with Lithium, and many other things.  our partnership (and client relationship) ended under the current regime when I was asked to not attend their conference last year – unless I signed a “code of conduct” that essentially said I was to ask no questions, and “behaved as stipulated”.  you can imagine my response, there are few words I can publish here from that conversation.  you can say i am bitter, you can say i am resentful, and you can say that i am writing this because of that.  you can also say that the easter bunny exists, and santa delivers all christmas presents within 24 hours every christmas eve — none of them are real.  i stand by my reputation and those that know me will attest to it.  i had a similar run-in with Lithium back in the day, and remain to this day friendly with the company and continue to provide advice to them – while maintaining the tough stance towards their products and positions (see above) as well as recognizing their prowess.  there are many others.  take this as you may – i stand behind my opinions and the only way i will change that is if Aurea does the right thing and stands by the current product.  i hope this was useful.  welcome your comments.

2 thoughts on “Opinion: My Quick Take on Jive’s Acquisition”

  1. Esteban, great writeup. One thing I would add is that any dismantling of the product team as a whole would be a sign of things to come. Ofer is fantastic, but his best skill has been hiring and positioning the rest of the product team in place. A signal of Ofer leaving would be bad, but if the others start to leave that is likely the end of the resurrection of Jive.

  2. Great point Mr. Insider – i did not meant to undermine the rest of the team by highlighting Ofer’s qualities. no leader is complete without a great team to support them. this is the case with Jive (and why i am bullish on the product).

    as for developers leaving, history is not kind in that aspect. i see 30% (Average) departure soon after acquisitions (usually leaders and more independent souls), and another 40% within the first year. this is not counting the ones that are “reassigned” or “RIF”ed by the process of merging two companies. all in all, in most acquisition you will see a loss of 60%+ of developers unfortunately.

    the truly innovative “overlords” realize that and make efforts to retain top talent regardless — but by definition PE firms don’t fall in that category…

    but i digress, you make a great point and i agree.

    thanks for reading, and commenting…

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