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Jive Software Going After Bigger Customers

Posted on Tuesday, Mar 13th 2012

According to Gartner, the enterprise software market is a $285 billion market. Within this, according to IDC estimates the enterprise social networking market will be worth $10.3 billion by 2013. The market remains largely untapped. Studies have revealed that just over 50% of enterprises have implemented some social networking tools.

Jive’s Financials
Jive Software (Nasdaq:JIVE) is a leading player in this market. The recently listed company’s revenues grew 53% last quarter to $22.5 million, surpassing the Street’s projections of $21 million. Product revenues of $19.2 million grew 61% over the year, while Professional Services revenues grew 21% to $3.3 million. Loss of $0.39 per share was, however, wider than the previous year’s reported loss of $0.30 per share. Excluding items, Jive’s loss of $0.28 per share beat the Street’s projected loss of $0.39 per share.

During the quarter, they continued to add brands to their customer list and enrolled new ones like Thomson Reuters, ACE Group, PricewaterhouseCoopers LLP/UK and SAP, to name a few. They now have more than 17 million users across more than 665 enterprise customers.

They ended the year with revenues increasing 67% over the year to $77.3 million. Product revenues grew 73% over the year to $65.3 million, and professional services revenues grew 42% to $12 million. Net loss of $1.95 per share was higher than the previous year’s net loss of $1.25 per share.

For the current quarter, Jive projects revenues of $23.5 million-$24.5 million with an adjusted loss of $0.13-$0.14 per share. The Street projects a loss of $0.14 per share on revenues of $22.9 million. The company expects to end the current year with revenues of $108 million-$112 million, with a net loss of $0.40-$0.45 per share.

Jive Launches New Customer Service Solution
To continue to attract bigger customers, the company recently announced the launch of a new Jive Social Customer Service Solution. The service claims to be the only available offering that supports both external customer communities and internal team communities. The service helps organizations solve their customer issues through their collaborative tools. Its features include the ability to integrate with CRM, case management systems, mobile platforms, and social networking tools such as Facebook. The customer service team can analyze social interactions to identify emerging concerns, pull up queries or concerns posted by customers on the company’s Facebook page, and publish solutions or responses again on the Facebook page.

Jive is also working on a new service, Project Thunder, scheduled for launch in summer 2012. Project Thunder is focused on getting enterprises to try Jive free without interacting with any sales teams. The free trial offer will be available for a certain time. As of now, Jive does have the option of letting enterprises try their software free, but the company believes that Project Thunder will make it simpler for enterprises to sign up and use Jive.

For now, Jive is surely taking the right steps to tap into their market. Their stock is trading at $24.59 with a market capitalization of $1.51 billion. It touched a 52-week high of $24.54 earlier this month. In December 2011, Jive released their IPO, priced at $12 a share, to raise net proceeds of $131.4 million.

In addition, Jive should consider partnering with or acquiring innovative companies such as 1M/1M premium member CrowdEngineering to offer related services like crowd-sourced customer support to large enterprise customers.

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