Jive quickens its step with quarterly profit

Profile picture for user slauchlan By Stuart Lauchlan February 8, 2017
A fourth quarter profit and a push into the US government cloud market - new moves from Jive.

Elisa Steele

It’s been some time coming, but Jive Software finally turned in a profit as a public company. It wasn’t a huge one - $600,000 for the fourth quarter on revenues of $51.7 million.

And with full year losses coming in at $14 million, it’s no guarantee that the worst is over, although that figure is an improvement on the $34 million losses the previous year.

Still, as a psychological milestone, it’s a welcome development for CEO Elisa Steele:

Looking back over the past two years our team has consistently worked to transform Jive into a business that would sustain more predictable results and ultimately drive growth. In May of 2016, we made key strategic changes, restructured the company and committed to a focused strategy.

We announced our new 3-Point plan that would maximize Jive’s unique value proposition, enable us to become profitable on a non-GAAP operating basis and position us for growth longer-term. We've had great success in executing the plan. We're excited that we solidly exceeded expectations quarter-after-quarter in Q2, Q3 and Q4.

We've also then pleased with the positive reaction from the industry and our customers regarding our plan and commitments. We ended 2016 in a stronger position than when we began 12 months earlier. We stabilized the business and are vigorously building the foundation for future growth.

It was the firm’s cloud offerings that fuelled growth in the fourth quarter, she adds:

About 40% of all new business activity and 83% of new logo business were related to cloud adoption in the fourth quarter. New customer business in the cloud has been consistently trending in the mid 80% range over the past several quarters and will continue to drive crowd adoption for both new and existing customers.

To enhance the cloud credentials, Jive is transitioning its infrastructure over to Amazon Web Services. Steele explains:

The collaboration with AWS builds on an existing relationship and will empower us to create our next generation of cloud solutions. The change will enable an even more rapid pace of innovation and improve overall service for our customers and their employees, partners and customers all in a seamless experience as never before. This will also set the stage for increased cloud adoption over time.

Why buy?

The pitch to all Jive customers remains the same and built on three ideas, according to Steele - save hard costs and increase efficiency; achieve softer business benefits like strategic alignment; and drive revenue generation and quicken time-to-market. It’s also all about helping organisations to deal with fragmentation of systems. Steele says:

The fragmentation concept resonates with our market, disconnects between information systems and increasingly distributed workforces have become serious challenges in the enterprise…Companies are dealing with increasing fragmentation problems. The massive proliferation of apps makes these problems even more acute. And it's become increasingly difficult for companies to rely on one provider’s stack to solve all their communication and collaboration needs. The result is that companies end up with a hodgepodge collection of tools that increase digital silos. IT teams end up spending a lot of resources trying to better manage the costly impact of these escalating trends and employees spend too much time trying to figure it all out.

Companies buy Jive to reduce fragmentation. This helps them cut costs, increase efficiencies, build engagement, generate revenue and decrease time-to-market. By enabling people to work better together, our Collaboration Hub helps customers achieve their mission and transform their business. We are leveraging all of these customer benefits to build our pipeline and drive revenue generation.

She cites Tivo as a case in point:

TiVo wanted to improve its internal communications by creating a more productive way for the company's employees to connect as well as enhances human resources capability. Jive helped TiVo replace its existing internet with a dynamic Interactive Intranet to better connect the company's entire employee base across more than 15 locations in seven countries. The company also relied on the site to harmonize employee resources and policies when it completed a major merger between Rovi and TiVo. With Jive, TiVo has been able to improve company-wide communication, streamlined the new hire on boarding and integration processes, keep dispersed employees more connected and measure the impact with sophisticated data and insights.

Steele is now eyeing up the US federal government market as a new growth area:

We hit an important milestone and are in the process of securing our federal risk and authorization program or FedRAMP certification. We received sponsorship from an existing federal customer and we believe this important certification will be a meaningful avenue to drive new federal and regulated industry business over time.

The certification will enable a Collaboration Hub Solution that will include new and enhanced security features as well as a certified FedRAMP cloud infrastructure hosted via AWS GovCloud:

Achieving FedRAMP certification for our featured GovCloud platform will strategically position us for new business with additional government agencies as well as protect our current federal customer base.

Another advantage is that our GovCloud platform will further advance our penetration in highly regulated industries such as healthcare and financial services. We are very excited about this new opportunity and to expand our presence with federal government agencies, which should enhance future revenue generation.

My take

Baby steps perhaps, but baby’s learning to walk in the right direction, even if it might be a while before the walking becomes jiving.