JIVE Earnings Quick Thoughts


I will do a bigger write up on JIVE but wanted to highlight why I'm actually happy with JIVE earnings. Firstly, as I already mentioned, I was not expecting Jive to pull a rabbit out of the hat all of a sudden. JIVE is a beaten down long term value play for me with a great potential ahead of itself. Obviously, JIVE's growth has slowed down in the past couple years but there is a good reason why I believe JIVE is on the right path to gain back the momentum.

Jive, although often clubbed as a cloud company, is not yet a true cloud company. When I talk about "true" Cloud, I am referring to Public cloud not some variation of cloud like "private" cloud etc. Jive has been investing and focusing on moving their solutions to the public cloud. I believe this transition will and has been negatively impacting Jive. Every category that fits the bill of public cloud has to solve the challenge posed by prospective customers - why does this solutions need to move out of our datacenter to yours out in the public ? Social Intranet and external communities has always been a non-cloud business but as these software become a bigger part of customers' strategy, there is a need to scale, deploy latest innovations, and become agile that only Cloud versions offer. I believe this transition will take a few months but Jive management understand that this is the key. Moreover, a cloud business offers Jive the opportunity to produce consistent revenue than on-premise deployments due to the subscription based models.

Another point many analysts miss is that Jive is branching out of its traditional Intranet business in to external business. This is evident in their latest re-platforming via JiveX external communities on the cloud. The CEO or CFO also hinted of new product verticals coming soon possibly at JiveWorld which is obviously exciting to hear.

Jive has been building out a go-to-market strategy that I believe will eventually pay off in a big way. The join partnership with Cisco will definitely add fuel to the fire because the partnership is not just about integration but it is about Cisco's sales power combined with Jive's technology and IP market lead. At about $500M market cap and revenues of at least $200M by end of 2015, Jive has become a great value play. Although I generally avoid takeover speculation, lets not forget that Oracle, SAP, Workday, Netsuite, IBM, Citrix, and even Google who is trying to get in to enterprise collaboration via Google Office, all either don't have a social collaboration platform for their suites or are miles behind Jive's IP and market share leadership.


DISCLOSURE: Long JIVE

DISCLAIMER: The above strategy is my opinion intended for informational purpose only and should not be used as professional financial advice. By reading the above text, you agree that any trades or investments you make are solely your responsibility. I cannot assure you that the above information is accurate. Trading stocks or options can be risky. Any profits, losses, or break even are solely your responsibility. Please consult a certified professional before buying or selling any stocks or options.

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