Forrester analyst Rob Koplowitz, the author of that report, said it makes sense to him that Jive might have to operate at a loss while it tries to consolidate its position. "Do they have to invest heavily to be relevant in a market that also includes IBM and Microsoft? Yes, I do believe that requires a significant investment," he said. "They have a very aggressive growth vision, and they're closing really big deals." As for Yammer's Sacks, Koplowitz said, "I think you have to take David's comments with a grain of salt."
For one thing, making it sound like Jive has been struggling along at a loss for 10 years is misleading, given that the company reinvented itself in 2007, when it took its first venture capital and began expanding its product line, Koplowitz said. Before that, "they were a small, conservative business out of Portland involved in a related but substantially different business."
Koplowitz did not include Yammer or some other social software products such as Saleforce.com's Chatter in his report, as a matter of market definition--he was looking at products with a broad range of capabilities, as opposed to those he considered more narrowly focused on microblogging.
Sacks also implied that Jive is traditional enterprise software, compared with Yammer, which is purely a software as a service product. That's partly true, Koplowitz said. Even though Jive talks about increasing "public cloud" deployments, for the most part these are based on hosting dedicated servers on behalf of enterprise customers, rather than signing them up for a multitenant SaaS service hosted on shared servers, he said. Jive does also provide some of its newer products and features, such as social analytics as true cloud services, Koplowitz said.
Jive's application hosting approach might be valued by some enterprises uncomfortable with the idea of comingling corporate data of any sort with data from other companies, Koplowitz said. Other security conscious institutions like banks appreciate that Jive gives them the option of deploying inside the firewall, "which, in a highly regulated industry with a diligent security team, might be the only way you'd be allowed to deploy something like this," he said.
Yet the pure SaaS deployment of Yammer also confers benefits, so Sacks does have a point, Koplowitz said. "With Yammer, he can roll new capabilities out to his customers so fast because he delivers one environment, he owns it, he controls it--that's pretty cool."
Gartner analyst Adam Sarner, who follows the social CRM part of Jive's business, said the company has "placed a lot of bets, I think good bets, and the IPO is going to fund some of this stuff. They have momentum over many other vendors in the market, who are well behind what jive has accomplished so far."
Most of the vendors he is following are not profitable, "in fact most are under $1 million and unprofitable--or if they are profitable, they are just barely profitable," Sarner said. The Jive IPO is a recognition that this market has real potential, but it's just getting started, and the same is true of Jive's business, he said. "Ten years or not, they're still at an early stage of this."