Summer Social & Search Big Financial Deals

It's been a fascinating few days for big money announcements: first Metaweb, the linked data company that is at the heart of the next generation semantic web was pulled into the Google family for an undisclosed amount, Atlassian took in $60 million of funding from Accel partners, and earlier today Jive Software announced they have closed $30 million in Series C financing.

It's been a fascinating few days for big money announcements: first Metaweb, the linked data company that is at the heart of the next generation semantic web was pulled into the Google family for an undisclosed amount, Atlassian took in $60 million of funding from Accel partners, and earlier today Jive Software announced they have closed $30 million in Series C financing. Kleiner Perkins Caufield & Byers (KPCB) led this investment, with continued participation from existing funders Sequoia Capital.

Atlassian are the quintessential low barrier to entry, bootstrapped startup, having grown organically until now ('More than 20,000 customers from 134 countries use Atlassian tools for collaboration and development.' according to their sales blurb) principally on the back of their Java community 'Confluence' wikis and 'Jira' issue tracking software.

These flagship products offer granular user permissions and extremely solid user support, particularly to the engineering user community who integrate them into their relatively low buck stacks. Jive have grown from an enterprise online forums and Jabber/xml internal network instant messaging developer ('Spark', 'Openfire') into a broader online communities provider.

They started with 'Clearspace' which was described as 'for teams, companies and communities looking for an easy and productive way to work with each other without time or location limitations....Eliminate redundant conversations, meetings, emails and ideas by opening doors to new co-workers, partners and customers'. This product eventually morphed into the current 'Social Business Software' now at version 4.5, presumably renamed to ride the fuzzy buzz around the term 'Social Media'. I remember Forrester Research saying that the word 'social' had a huge awareness with their analysis customers despite the lack of focus on what it really meant around the time of this product renaming in March 2009. The old Jive Forums product and business was acquired by GroupSwim who recently became part of Salesforce.

Metaweb's $US 57 million funding (principally by Goldman Sachs) prior to their acquisition by Google, matches Jive's total funding to date, but they are playing in a much broader space than the current enterprise 'social' summer of love in the financial and marketing communities, being arguably at the heart of the next generation internet. Jive and presumably Atlassian are joining the large queue of funded and private companies hoping to IPO in an extremely difficult global economy, where Google and Metaweb plan to maintain Freebase as a free and open database 'for the world'.

The 2.0 technology challenges of fragmented information in increasingly sophisticated and rapidly expanding business silos, the limited ability to filter real time communication in services like Twitter and its various enterprise variants and other factors are likely to eventually take the shine off the current fashion for all things social. In a crowded market from tiny point solution technologies to the 800 pound incumbents Microsoft Sharepoint, Lotus's menu of offerings and Cisco's Quad - a sophisticated new 21st century collaboration environment from IP packet to unified communications - make this is a challenging time for end users inundated with sales calls from vendors offering lots of tool variants for a wide array of uses.

Identifying what specific business problems you are solving can be fudged when, for example, engineers install Atlassian's various products for their specific project needs and then offer that solution to their broader business. Jive's heartland meanwhile tends to be land and spread within business units of enterprises, where they are often coexisting alongside Atlassian, Sharepoint, SocialText, Lithium forums and other department's installs, typically hitting the political fault lines between business units.

All these solutions are battling legacy and/or industrial strength Business Intelligence technology inflexibilities, email and document overload and the lack of efficient global search tools. Google works well on a planet level at search because it relies on vast amounts of raw information at scale to process and put in order: business information tends to be much harder to apply brute strength search crawl parameters against behind the firewall, using products like Microsoft FAST, Google appliance or Autonomy because the raw materials are inadequate to sort. (Think of all those multiple minor version variants on documents and edited wikis in your Sharepoint shared drives, team spaces, email and databases...).

Where those working in the social media business design world are typically working to marketing campaign time scales - 'social' communications and interactions on topics - the Enterprise 2.0 world is grappling with enduring use cases for increasingly expensive core collaboration technologies (all these venture investors are looking to get 10X return through customer sales). We are past the point of cajoling employee laggards to get on the 2.0 bus and adopt the methods the cool kids are using in their pilot. Before deploying enterprise scale budget businesses need to know that their business needs are being met by technology that is it for purpose at scale and for enduring use over time to achieve agreed goals.

The Metaweb video at the top of this post shows how 'barcoded' consistent 'entity' labeling is likely to be in our near future to help us cut through the information clutter: I'm assuming Google haven't bought Freebase to subsume it into their current point solution search offerings but to provide a future service which provides information in context around topics. This is the next generation of the web whether Google offer it, or a future semantic web rival or start up assumes the mantle, and much of the hard work around the semantic 'middleware' is in place now.

Meanwhile the foundational technology of Atlassian's very solid set of enterprise tools are now owned by Oracle, who control Java's destiny, and Jive need to ride the social wave momentum to an IPO and beyond to compete with the entrenched enterprise collaboration platform vendors. For customers beginning to wise up to the reality that sales speak and product evangelism don't address their core problems, and that these are not light weight, inexpensive and ephemeral operational tools, this translates to increasingly urgent need for clear vision of where they need to be going to succeed....

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