A Forrester study estimates the enterprise social networks market to grow to $6.4 billion in 2016 from an estimated $600 million in 2010. McKinsey also estimates that the use of enterprise social network will grow at an annual rate of 42.4% over the period 2011 to 2016.
Acquia’s IPO Plans
Among enterprise social network platforms, open source publishing system Drupal is a commonly used platform. It is a free software package that lets users organize, manage, publish, and customize content. Boston-based Acquia Inc. is a privately held organization formed to help Drupal’s users with technical and other support issues. It was founded by Dries Buytaert, a key developer of Drupal, and Jay Batson.
Acquia helps Drupal’s users by providing products, services, and technical support for Drupal through Acquia Network. For smaller businesses, Acquia also offers Acquia Cloud, a hosted version that manages websites for its clients. It also has an iPhone app for managing and editing customers’ websites while on the move. Management wants Acquia to be to Drupal what Red Hat is to Linux. The comapny earns revenues by charging a subscription fee for its software services.
According to market reports, last year Acquia earned revenues of $21.8 million, making it the eighth fastest growing software player in the 2012 Fortune 500 list. Acquia targets to end the current year with revenues of over $56 million. Its client list of more than 2,500 customers includes brands like NBC, Warner Music Group, eBay, Twitter, and Humana to name a few. Acquia’s management claims that nearly 75%-80% of Global 2000 firms that newly begin using Drupal are now becoming its customers, suggesting the potential for strong growth in the future.
To date Acquia has received venture funding of $68.5 million from investors that incude North Bridge Venture Partners, O’Reilly AlphaTech Ventures, Sigma Partners, Tom Erickson, and Tenaya Capital. Its latest round of funding of $30 million included new investors Goldman Sachs and Accolade Partners. Analysts expect Acquia to file for an IPO within the next 12 to 24 months.
Acquia plans to use the current round of funding for market expansion. It plans to add 125-140 jobs in the next year to its existing strength of 260 employees. It is also eying international expansion and will invest in sales and marketing efforts in Europe and Asia-Pacific.
It is also growing its product offerings and recently released a beta version of Acquia Media Cloud. Acquia Media Cloud will help teams manage their digital media content. Further, it released a new version to support Drupal Commons, a free and downloadable version of Drupal that can be customized to build interactive custom-facing websites. The upgraded version includes new templates for mobile users and features such as a recommendation engine for Drupal content.
As part of its efforts to manage spam on customers’ websites, Acquia acquired Mollom, a spam filtering service, earlier last quarter. Mollom provides content monitoring solutions for user-generated content such as comment management on blogs. Through the acquisition, Acquia will be able to build the Internet’s first social content moderation platform.
This is an interesting company with a viable commercial open source business model, a model that we have covered extensively on the blog.