Jive CEO: Freemium in the enterprise is dead, and email is next

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Many enterprise vendors are focusing on the wrong metrics, according to Jive CEO Tony Zingale, and it's going to come back to bite them this year.

Anybody can give away a sub-par product for free then trumpet high user adoption rates, Zingale believes. But customers don't care how many other people are using a product -- they only care if it will help their business by reducing expenses or increasing revenue.

"Free products don't deliver," Zingale told reporters last week. "We can talk about free trials, free use models to get people to engage, but freemium in the enterprise -- write it down, it's dead." 

Jive cited statistics from an unnamed "top three management consulting firm" who studied Jive customers and found they experienced a 15% increase in worker productivity and 2% to 4% increase in top line revenue after installing Jive. Companies also saw a 16% reduction in meetings and 21% less email.

"These are the metrics that matter -- not how many users logged on this morning, not how many email addresses were collected to try my activity stream," Zingale argues.

The event was part of Jive's big sales push for the beginning of 2013, the year that Zingale says social enterprise software will finally become mainstream and begin to replace email -- in fact, he believes that email usage will drop 50% within the next five years.

Jive's pitch is definitely top-down. IT may not be driving purchasing decisions as they did five years ago, but Jive believes line-of-business leaders should pick the tools that they believe will offer the most value, then tell employees to follow along. That's counter to the consumerization ethic preached by YouSendIt and many other vendors, which are relying on employees to drive adoption. 

In fact, one of the big knocks against enterprise collaboration software is lack of adoption -- if you build it, they won't necessarily come. 

That's because a lot of early adopters went about it wrong, according to Forrester analyst Rob Koplowitz, who also spoke at the event. Instead of rolling a product like Jive out across an entire company, then telling everybody to use it, enterprises should focus on a few key areas who can stand to gain the most by collaborating in new ways.

"Success comes from success -- you have to prove this is valuable in one part of company," said Koplowitz. "Start with a limited high-value opportunity and prove it out from there. Once you have a full enterprise rollout, you can focus on adoption and engagement. But do this after you've mapped it out."

Koplowitz also said that executive support is critical. "If business owners want to change how customer service works, that's a big change, not a trivial change," he explained. If it turns out that the changes aren't working, executives must be willing to accept the data and make changes, rather than ignoring it and plowing ahead. "An executive must say that's good information, not challenging information."

Jive also highlighted some recent product improvements, including Structured Outcomes, which allows team members to mark final decisions clearly, so teams can avoid going back over the same ground in an endless series of meetings and emails. There's also a new iPad tool called Jive Present, which gives salespeople quick access to the collateral they need to make sales.

Jive's pitch is certainly getting it new customers -- according to its last earnings report, its customer count was 761 at the end of September 2012, up 16% from the previous year, and quarterly billings came in at $39 million, up 47% from the previous year's quarter. (Jive reports Q4 2012 earnings on February 5.)

We've asked the company to talk to some of these customers to get their stories about how Jive and these features helped them reduce email, increase efficiency, and -- most important -- help their bottom line. We'll report their stories as soon as we get them. 

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