Global CIO: Venture Capital Kings Pump $30M Into Jive's Social BusinessGlobal CIO: Venture Capital Kings Pump $30M Into Jive's Social Business

The last time Kleiner Perkins and Sequoia did a joint funding close to this size, the recipient was Google. Will lightning strike twice?

Bob Evans, Contributor

July 20, 2010

5 Min Read
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"We're in a great place to look at non-organic tuck-in opportunities," LeBlanc said, "and we've been out shopping and there's certainly lots to look at. The funding also gives us the chance to look at increasing the Jive development team—we've already hired upwards of 100 this year split between Portland [Oregon, where the company was founded] and here in Palo Alto [site of the company's new headquarters]."

Noting that Sequoia and Kleiner Perkins "haven't done something of this size since they partnered on Google," LeBlanc added that the Google joint funding "was a smaller raise" and said that underscores the confidence that two of the world's leading VC firms have in Jive's technology, leadership, and market opportunity.

Lochhead, who joined Jive's board a few months ago, said Kleiner Perkins and Sequoia were convinced of the rightness of Jive's strategy of bringing together into a unified set of solutions what is currently a "very fragmented" market. Current approaches, Lochhead said, require customers to try to string together disparate tools for internal collaboration with those for external communications and social marketing along with yet another unrelated set for social monitoring and listening.

Jive offers all of that in a deeply integrated fashion, Lochhead said, and so the new investment "just allows us to accelerate our innovation cycle in terms of the number of engineers we're hiring to enhance these products and bring new ones to market."

On top of that, Lochhead echoed LeBlanc's comment about Jive being on the hunt for acquisitions, and said the $30 million gives Jive some assets that other hunters might not have.

"As a pre-IPO company, you want to have as many weapons in your arsenal as possible," he said. "So we can offer Jive stock to a company we're looking to acquire and pre-IPO, we think that's pretty compelling. But cash isn't a bad thing either—never has been—and with this investment, we've now that that option as well."

Combined, Kleiner Perkins and Sequoia have an extraordinary legacy: , including Apple, Amazon, Citrix, Electronic Arts, Genentech, Cisco, NetApp, Intuit, Juniper, Symantec, and of course Google and many others.

Above, I referred to them putting the "Midas touch" on Jive, and I said that because as CIOs evaluate whether Jive is right for their businesses, they will be taking a long look at the company Jive keeps. And pre-IPO or not, Jive's stock just went way up because of the bullish backing it has won from VC kingmakers Kleiner Perkins and Sequoia.

But even with that, is social business "the most important enterprise software category in a decade," as Kleiner Perkins' Schlein said? That might be a bit of a stretch as some new predictive-analytics technologies and solutions give companies the insights to make better decisions, and some new tools enhance the ability of businesses to operate as close to real time as possible.

However, the way the point is framed, you could argue those have roots extending back beyond a decade, and the whole argument degrades into something silly.

More important are these questions:

1) Is social business an indispensable capability that all types of businesses will need to master in the next year or two? I'd say the answer is unequivocally yes.

2) Are CIOs and other business execs currently clamoring for tools that will let them be more collaborative, more engaged, and more open to dealing with customers on the terms that those customers dictate? Again, the answer is unequivocally yes.

3) Will Salesforce.com with Chatter and SAP and perhaps even Oracle and Microsoft look to pounce on the same opportunities Jive is racing to exploit? Again, no question—and they're all much larger and better-known.

4) Against such competitors, does Jive have a chance? It does indeed because while social business for those big companies is currently an adjunct to an extension of what they'd like to do sometime soon, it is for Jive the sole reason for existing. It's the classic case of the relatively small but incredibly driven and focused company able to be faster, deeper, and smarter than its vastly larger competitors who have lots and lots of other high-level priorities to focus upon.

One other thing to consider: in a column last month called Global CIO: Will Social Media Kill The CIO?, I laid out the following argument:

"But I'd put it this way:

1) Social apps will kill those CIOs who don't maintain control of what's on the network.

2) Social apps will kill those CIOs who don't eagerly and sincerely embrace and encourage them.

3) CIOs need to find a way to reconcile those apparently irreconcilable realities.

Because the alternative is deadly."

RECOMMENDED READING: Global CIO: Can Jive Drive Social Business Software? Global CIO: Will Social Media Kill The CIO? Global CIO: Why CIOs Need The Transformative Power Of Twitter Global CIO: In The Age Of Facebook, IT Problems Become CIO Nightmares Global CIO: 10 Reasons CIOs Will Get Fired This Year Global CIO: How CEOs See Cloud Computing Global CIO: The Top 10 CIO Issues For 2010 Global CIO: CIOs Shattering Social Media Taboos, RightNow Says GlobalCIO Bob Evans is senior VP and director of information's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].

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About the Author

Bob Evans

Contributor

Bob Evans is senior VP, communications, for Oracle Corp. He is a former information editor.

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