NewsGator's New CEO Plots Social Software Growth
'I wouldn't join a company in crisis,' says new president and CEO Daniel Kraft, whose courtship was in the works even before Microsoft bought Yammer, according to J.B. Holston, now chairman. Yet the shakeup is recognition of a changing market.
As a Microsoft partner, building enterprise social networking applications on top of SharePoint, NewsGator certainly will have to adjust its strategy following Microsoft's $1.3 billion acquisition of Yammer. Microsoft is also preparing to provide more social software features in SharePoint 2013, expected to ship early next year. Yet in an interview, Kraft and J.B. Holston--who is moving from CEO to chairman of the board--said Kraft's hiring is part of a strategy for "accelerating growth," not averting calamity.
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"I wouldn't join a company that was in crisis," said Kraft, who joined the company this week. "I'm not really a good restructuring guy. Of course, there are tensions and question marks about what Microsoft's thoughts are about doing this series of activities. That's leading us to have to have more conversations with clients, who are telling us, we're a little bit confused with our big partner Microsoft – can you explain what it all means?"
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Even as Yammer settles into its new role as a part of Microsoft, the appeal of its cloud software is not much different than it was a few months ago. Yammer remains attractive to organizations "that are saying, let's test the waters with something that makes it very easy to get started," Kraft said. NewsGator will continue to position its product "for companies that don't just want a toy, that want a social software infrastructure," he said. "We absolutely believe the Microsoft infrastructure is an excellent foundation to build on."
For about the past six months, Kraft had been advising NewsGator through his consulting company Ifridge & Company, which he said specializes in showing "smaller companies with $1 million-plus revenue how to gain traction." Previously, as CEO of the Web content management software company RedDot (now part of OpenText), he had grown that organization from about 80 people to 300, and NewsGator is on the same trajectory with more than 100 employees, he said. Kraft is assuming a chairman role at Ifridge, which will not continue its contract with NewsGator. However, two other Ifridge leaders are following Kraft to NewsGator: Stefanie Lightman as senior VP of corporate strategy and Markus von Aschoff as VP of product management.
Holston said he was the one who suggested to his board that Kraft join the company, and not in response to any outside event. "We started the conversation well before [the acquisition of] Yammer was a glimmer in anyone's rumor mill," he said.
NewsGator did foresee the changes coming in SharePoint, which it has already moved to leapfrog with NewsGator Social Sites 3.0. "We've already been pivoting to a broader relationship with Microsoft technologies beyond just SharePoint," Holston said, and NewsGator will also reach "beyond Microsoft" to provide social connections between SharePoint and back end systems from vendors like SAP.
"All those things we thought Daniel could help accelerate," Holston said.
The two met at one of the Boston events of the Enterprise 2.0 conference series--now known as E2--where the panel topic was "Enterprise 2.0 and a couple of buzzwords." Kraft by then was working for OpenText and he recalls the moderator was trying to set up some conflict between him, representing the established enterprise content management player, and Holston, the leader of a startup. They wound up agreeing more than they disagreed about the state of the market and its future, "probably making things very boring for the audience," Kraft said.
After leaving OpenText, Kraft remained interested in social software and the future of work, giving many talks on the topic like this one from a TEDx event in Germany. "Social has moved from, 'Hey, it's something you should be in,' to 'Hey, this is something you must be in,'" he said. He sees big opportunities to deepen and broaden social integration and "aggregate information that's in the process world, from SAP and Oracle."
Most common business processes have no social layer, but even when doing something routine like filling out an expense report, employees ought to be able to add a comment that the hotel where they stayed wasn't very good and colleagues ought to consider going elsewhere, Kraft said.
NewsGator is a private company, but it is "growing quite well," Kraft said. "We just have some operational things we need to continue to do right." He said he will be looking to bring more smart managers on board and will explore other ways of bringing in talent, including acquisitions.
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