Online Community Platform Company and Product Update
Strong Results for First Half 2008
By Matthew D. Lees, August 14, 2008

NETTING IT OUT

This is our first update of companies and products in the online community and social networking space. Our watch list for this inaugural report consists of the following 10 companies: Awareness, HiveLive, Jive Software, Leverage Software, Lithium Technologies, LiveWorld, Mzinga, Small World Labs, Telligent, and Webcrossing. For each company, we look at customer acquisition; changes to products, services, and pricing; new partnerships; financial results; and organizational changes.

It was a very good first half of the year for all the companies on our watch list. For each of these organizations, sales, customer accounts, and/or company size grew. (Most of the companies are on track to see at least incremental revenue growth for 2008 compared to 2007, while others expect to double or even triple revenue year over year.) Nine of the 10 companies increased staff during 1H 2008 and are still in hiring mode. The companies, as a group, raised over $51 million in outside investment, opened four new offices (three of which were outside the US), and completed two corporate acquisitions.

In addition, all the companies kept their product development teams busy, with new releases ranging from a few key enhancements to entire platform overhauls. Leading the trend toward integrating external and internal communication and collaboration, 9 of the 10 companies focused on integration and extensibility, and now provide RSS feeds, widgets and/or API sets. And 4 of the 10 provide specific integration with Microsoft SharePoint server.

ONLINE COMMUNITY PLATFORMS: FIRST HALF CALENDAR YEAR 2008

Introduction

For many years my colleagues have been writing these valuable and valued updates in their own practice areas. This report marks our first in the online community space. We expect to publish such an update every six months to keep you up current on the online community industry and the premier companies and platforms in this space.

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Watch List

It is no easy task to decide which companies and products to include, and which not to. For this inaugural report, we decided not to create formal criteria for inclusion in our watch list, although we may do so for the next update in January 2009. In lieu of definitive criteria, the key considerations we look for are companies and products that (1) do—or can—support large-scale online communities, and (2) have a track record of doing so.

Even with their similarities, the companies we cover here are definitely not a homogeneous group. For sure there is overlap in their target markets, growth strategies, partner collaboration, R&D philosophy, pricing models, service offerings, and so on. But differences abound in each of these areas as well, as the pages below uncover.

The same is true of the platforms themselves. While they all provide more or less similar components (e.g., forums, blogs, search, profile management, administrative tools, widgets and APIs, etc.) for enabling customer communities and social networks, their technology architectures and feature sets vary, as do the degrees of access and control they give clients (e.g. for customization). Some (most) are provided on-demand, while others are designed for on-premises use. And some integrate out-of-the-box with third-party applications, while others require custom work to do so.

In a less structured way, we do look at many other vendors and platforms that support online communities and social networks that are not covered in this report. These include wikis (e.g., Wetpaint, Socialtext, BizWiki), collaboration-based applications (e.g., IBM Lotus Connections and Microsoft SharePoint server), social networking systems (e.g., Ning, Igloo, and CollectiveX Groupsites) and others. We may include some of these companies and products in future updates, and we look to your perspective on which of these—or other—companies are of interest.

The companies covered in this report are:

1. Awareness (www.awarenessnetworks.com)

2. HiveLive (www.hivelive.com)

3. Jive Software (www.jivesoftware.com)

4. Leverage Software (www.leveragesoftware.com)

5. Lithium Technologies (www.lithium.com)

6. LiveWorld (www.liveworld.com)

7. Mzinga (www.mzinga.com)

8. Small World Labs (www.smallworldlabs.com)

9. Telligent (www.telligent.com)

10. Webcrossing (www.webcrossing.com)

Summary of Community Platform Company Results for 1H 2008
Please download the PDF to see the table.
Table A. This table summarizes key first-half 2008 results of the 10 companies on our watch list.

Trends

1. STRONG GROWTH: SALES, CUSTOMERS, STAFF. For all the companies in our watch list, sales, new customer accounts, and/or company size grew during the first half of 2008. Most companies are on track to see at least incremental sales growth for 2008 compared to 2007, while others expect to double or triple revenue. Nine of the 10 companies we cover are still hiring (only LiveWorld currently has no open positions). This is a good sign for the industry; with companies (and investors) taking a more pragmatic and deliberate approach to business, it doesn’t feel like the frenzy of the dotcom boom 10 years ago.

2. BLURRING OF EXTERNAL VS. INTERNAL COMMUNITIES. Our focus at the Patricia Seybold Group is on enabling those who engage with companies from the “outside,” so we tend to be more interested in systems that support external communities of customers and/or business partners. This is not a clear delineation, though, as Web 2.0—social networking in particular—hits the enterprise. But as advocates of customer-centric approaches to business, we are sanguine on the trend that is moving away from the “us vs. them” mentality (with employees as “us” and everyone else as “them”), and toward a more group- or stakeholder-based approach, with customers and partners simply being another group of stakeholders. It’s happening slowly, but internal systems are being opened up to allow appropriate access to customers and partners. And community platform vendors are leading this trend; half of the companies we cover have products specifically developed for combined internal and external collaboration.

3. INTEGRATION. The days of standalone message boards are over; “integration” is the watchword of the day. Community platforms have to play nicely with a variety of other applications and sites, from CRM systems to third-party analytical tools, and from Web portals to external networks (e.g., Facebook). They have to accept data in (such as authentication via single sign-in) and syndicate content out. Four of the 10 companies provide SharePoint integration (Awareness, Jive Software, Leverage Software, Telligent), and others, no doubt, have SharePoint in their sights. And all 10 platforms provide integration and extension hooks via RSS, APIs, and/or widgets.