Salesforce Acquires Rypple For Social Employee Performance Management

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Social performance management company Rypple will become Salesforce.com Successforce as part of an acquisition the companies announced last week, expected to be final in early 2012.

The purchase recognizes Rypple's success in creating social media mechanisms for tracking and recognizing employee performance, as defined in partnership with prominent customers like Facebook. Last week, Rypple announced Social Goals 2.0, an improved version of its personal and organizational goal-setting application, which was also the product of a collaboration with a Web 2.0 startup, Spotify.

Salesforce plans to offer Successforce as a complementary product to Chatter, its cloud-based enterprise social networking platform. This is one of the ways Salesforce is showing a broad commitment to social business, reaching beyond collaboration for salespeople to encompass human resources processes that span the enterprise. What's not clear is how far into the human resources, or human capital management (HCM), space Salesforce's ambitions extend.

"The next generation of HCM is not just about a cloud delivery model, it's about a fundamentally better way to recruit, manage, and empower employees in a social world," said Marc Benioff, Salesforce.com chairman and CEO, in a statement.

[ Salesforce is determined to become a major player in new-era marketing, and its Radian6 acquisition is leading the way. See Salesforce.com Steps Past CRM, Into Social Marketing. ]

The analysts at Constellation Research who have been studying the human resources and enterprise 2.0 aspects of the acquisition suspect Salesforce will stop short of creating a full human resource management software suite to compete with the likes of Taleo or Ultimate Software.

"You won't see them creating a payroll system--that's just not interesting," Constellation analyst R. "Ray" Wang said. "The era of transactional systems is over. This is about systems of engagement and experience."

Nick Stein, director of content and media at Rypple, said the natural expansions of the product line would be personnel processes that have a social component, such as internal and external recruiting and onboarding of new employees.

So far, Salesforce is signaling that the Rypple products will continue to have an independent life, outside of integration with Chatter, meaning that the partnership and integration with Jive Software could continue, and perhaps others could still follow. Rypple was one of the launch partners for Jive's Apps Market, meaning it can be accessed as an embedded app that has access to the Jive activity stream.

"All of that still has to be determined, but our belief is very much these things should continue," Stein said. Social apps tend to be more valuable when they are available on multiple platforms, he said. Just as Facebook found greater success by welcoming integration with third-party application developers like Zynga, "I think that's a moral to look to, when you are building a platform, in terms of whether you want to keep it closed or open up," he said. He expects the Jive partnership to continue and thinks new integration partnerships with other enterprise social networks are still possible.

Jive chief marketing officer John Rizzo said he hopes the apps market partnership will continue. "We hope it doesn't affect our partnership with Rypple at all," he said.

Constellation Research analyst Alan Lepofsky said he thinks Salesforce might want to support the integration with Jive as a way of continuing the momentum Rypple had been building up as an independent company. Rypple as a standalone tool is "kind of interesting," he said, but it's more compelling as part of a broader enterprise social platform and "added an element of fun to Jive." Jive is a good partner for Rypple, he said, "and it's not completely overlapping with what Salesforce does."

Rypple allows an employee's peers and managers to dispense public recognition for a job well done, which can be distributed through Rypple's built-in social network or through integration with other activity feed systems, such as those in Jive or Chatter. At Facebook, Rypple recognition is built into a custom social network the company uses internally. Rypple Loops, which is in use at Facebook, incorporates all that feedback into processes for performance and salary reviews. However, a major thrust of the philosophy behind the application is that recognition, rewards, and other feedback can't be limited to the annual review.

"People need to get recognized in real time. They need timely feedback and coaching," Rypple co-founder and co-CEO Daniel Debow said in an interview. The Social Goals 2.0 product expands on that with a process for setting company goals and tying them to specific achievements, based on the Objectives and Key Results (OKR) methodology developed by Intel. Spotify was already using the OKR model and asked Rypple to help automate it through software, Debow said, and about 15 companies have been testing the product in beta form.

Lepofsky said he sees potential for Salesforce to meld the Rypple acquisition with its Do.com task management system to create a more complete application for managing tasks and projects, with integrated management of the performance of the people working on those projects.

Wang said Rypple is also known for making smart use of gamification techniques--fun ways of encouraging, reinforcing, and rewarding behavior--which Salesforce can also apply to its core business of making salespeople more productive.

Bobby Yazdani, founder and CEO of Saba Software, was quick to interpret the acquisition as evidence that Salesforce recognizes human resources processes are central to the potential of enterprise social networking--which happens to be the thrust of his firm's People Cloud initiative. Saba offers both top-down performance review software and a peer-to-peer model more like Rypple's, he said, but has more experience with enterprise customers.

Rypple has a nice reference customer in Facebook, Yazdani said, "but Facebook is already working as a transformed future business, today." The tougher trick is helping big, established companies achieve that transformation, he said.

Follow David F. Carr on Twitter @davidfcarr. The BrainYard is @thebyard

According to our Outlook 2012 Survey, IT should expect soaring demand but cautious hiring as companies use technology to try to get closer to customers. Also in the new, all-digital issue of InformationWeek: Inside Windows Server 8. (Free registration required.)