Cisco WebEx Social is Out, Welcome Jive!


Today, Cisco announced a partnership with Jive to integrate the latter’s social collaboration platform with Jabber and WebEx. The partnership has set the Jive stock on fire, which soared by 9% shortly after the announcement. The partnership will see deep integration between the Jive Social Business Portal and Cisco’s communications and collaboration applications that will allow users to initiate voice and video calls, see presence status and do instant messaging at the click of a button. The announcement ends Jive’s prolonged quest to partner with leading communications vendors to kickstart sales and really boost market sentiments. For customers, they can engage in persistent, real-time conversations without having to switch between multiple platforms and interfaces.

First Quad, Now WebEx Social

Buried somewhere deep under the announcement was a by-the-way-we-are-dumping-WebExSocial statement from Cisco. By abandoning WebEx Social, Cisco is acknowledging that its social collaboration efforts have failed to impress markets and customers. WebEx Social’s earlier avatar was Quad, Cisco’s on-premises version that never progressed beyond pilot implementations among its customers. The platform was too complex and closed (and probably expensive) to really become a competitive force in the market. Cisco’s efforts to move it to the cloud was an attempt to piggyback on its more popular cloud-based collaboration platform, WebEx, and probably spur adoption through some intelligent bundling.

Jive’s Window of Opportunity

Jive has a reason to celebrate. With the Cisco brand name, marketing muscle, and sales prowess, it is easier to get a foothold in large enterprise accounts. However, I believe this is going to be just a short-term window of opportunity, until Cisco finds an alternative, either via an acquisition or in-house development of capabilities. I cannot but help compare this partnership with the earlier Cisco-Radvision deal.   In the early days, Cisco did not have any video products outside of its TelePresence suite.  Multi-point control units or MCUs were outsourced from Radvision under an OEM agreement. Cisco had the TelePresence Multipoint Switch, a vastly different architecture from the Radvision SCOPIA MCUs, which were standards-based and could interwork with MCUs from other vendors.  When Cisco opted for the M&A route to fill portfolio gaps, Radvision had close to $44 million at stake, which accounted for about 42% of its total revenues. The Cisco pull-out from the partnership subsequent to its Tandberg acquisition had dire consequences for Radvision, which lasted until the very end, before it was sold to Avaya.

The Jive management should carefully evaluate how much they bet on this relationship with Cisco, given that its former competitor could at any given point of time go back to being just that, a competitor.



Will Twitter Ever Reach Facebook’s Scale?


At little past 5 PM Eastern Time today, Twitter stocks fell by 14% from its initial IPO opening price of $45.10, apparently on poor market sentiments triggered by its less-than-expected growth in user base. In fact, the markets seem less anxious about the net loss of $132 million than the slow user growth. Timeline views by monthly active users declined 8% year-on-year. Analysts are fervently comparing what they deem as a ‘lackluster’ performance by Twitter with the great results of Facebook a week ago. I guess this was inevitable given that Twitter’s newly launched profile page mimics Facebook’s so closely. However, as there are some fundamental differences between the two social media networks in terms of user engagement and content lifespan, I think the comparisons are less than fair.

Expectations versus Performance

After a great year in 2013, when Twitter beat Wall Street estimates in terms of both earnings and user additions, the 5.8% growth in monthly active users this quarter was not enough to boost sentiments. I think the low user additions, much below Facebook and LinkedIn averages, is triggered by poor user experiences. Though Twitter has been tweaking its UI in order to bring in more visual experience to its audience over the years, it still feels like it has a long way to go. The company also has challenges when it comes to user engagement, partly because of the very nature of Twitter and partly because of the poor user experience.

Twitter’s sub-par user growth is also because of the significant downtimes it has witnessed over the years. How many times have you been turned away by the “Oops, something seems to be wrong” or the fail whale banner when you had rushed in to post a tweet? To be fair, some of these downtimes were because of unforeseen network overload when some big news or event breaks over the Internet. Twitter seems to have learnt from its past mistakes though as it has been investing in infrastructure and network failover mechanisms over the last several months.

The Future

The biggest challenge for Twitter is that its growth is slowing even when it has enough headroom to grow. Unlike Facebook, it is not nearing market saturation even in mature markets such as the US, let alone globally. While Facebook’s slower growth in user base is more or less anticipated, Twitter should be sprinting along at a considerably faster rate, which is not happening right now. The growing popularity of competitors such as Pinterest, Snapchat and Instagram can be attributed to the fact that these are more appealing visually and hence sustain user engagement. Even relative newcomers such as WhatsApp, which has about 55 employees, had a daily active user (DAU) count of 353 million compared to Twitter’s 120 odd million DAU in early 2014. However, WhatsApp’s use case as a messaging application is different from Facebook or Twitter, which are both pure-play social networks.

Twitter CEO Dick Costolo admits that the platform has to become more user-friendly in order to grow and retain registered users. However, I am not entirely convinced that copying a Facebook-style profile page is a step in the right direction. Twitter has to leapfrog competition in terms of both user interface and experience in order to overcome some of its growth challenges. Also, for a company that bets most of its future growth in international business, it has not been consistent in rolling out new products for the non-US markets, contributing to the growth slowdown.

Growth in the most prospective Asian markets has been slowing for sometime now. Especially in Japan and South Korea, where the percentage of mobile users is very high, due to a larger market movement towards private social networks rather than more open platforms such as Twitter. In Korea, only one in seven of Twitter users are said to be even moderately active on the social network. Dick Costolo rejects any claims that the fundamental nature of Twitter could be inhibiting adoption. While this may be true, it should also be acknowledged that despite the fact that a majority of its users are not from the US, international revenues contribute just 27% of total sales.

Will the recent improvements in the interface be enough to overcome what seems to be a mounting number of issues? I am skeptical.