"A Massive Opportunity"

Jive Software CEO Tony Zingale says he's never seen a market grow like social media, and he believes his company is poised to take advantage of that trend as it moves into the business space.

Image: Alex Dunne Via Flickr. Design by Sean Driscoll

Tony Zingale has seen a lot in his 30 years in the Silicon Valley tech business: The rise of microprocessors, the Ethernet, the Internet.

But the CEO of Jive Software said of social media, “I’ve never seen a marketplace move at the rate of this marketplace.” Facebook announced last week it has topped the 500-million-user mark, and more than 300,000 people sign up for Twitter accounts every day. And Zingale believes his company is poised to be to the business marketplace what those players are in the consumer space—potentially a new giant with the first breakthrough enterprise technology in a decade.

And with new backing from two of the top venture capital firms in the world, explosive customer growth among some of the largest companies in the nation, and high expectations, Zingale told Portfolio.com there’s a chance his company could go public within a year.

“I think social is the biggest thing we’ve seen,” he said. And his company, he believes, is right in the sweet spot of social media. “The one where all the money’s at is enterprise.”

That’s clearly the kind of thinking that has attracted the two titans of Sand Hill Road, Sequoia Partners and Kleiner Perkins Caufield & Byers, to team up on Jive’s third funding round, with the two firms betting $30 million on the company, bringing the total raised by Jive to $57.5 million, with Sequoia as its original venture capital investor. The last time Kleiner Perkins and Sequoia partnered on a funding round that big was when they backed a little Mountain View, California, search company called Google.

The funding round was announced last week.

Ted Schlein, managing partner at Kleiner Perkins, told Portfolio.com, “We both think that we have a tiger by the tail. If Jive’s growth rate is any indication, it’s on its way to being proven.”

Jive, founded in Portland and since moved to Palo Alto, California, provides a platform of collaboration software, social-media software, and social-media monitoring tools that can be used across a business, and it’s attracted an impressive array of customers, including Intel, Nike, Netflix, and Northrop Grumman. The company has 3,000 customers and 15 million users. Its sales are in the $75,000 to $150,000 range per customer, and it has landed 10 million-dollar deals.

“We think we have a chance to be the next great enterprise software breakthrough,” Zingale said.

But he acknowledged that Jive could also face much stiffer competition going forward, as Jeremiah Owyang, founding partner of Altimeter Group, notes in a post.

Oracle or SAP could decide to enter the market, and they can be very stiff competition. Salesforce.com and RightNow could also be threats, Owyang writes. And, he writes, as Jive grows larger and taps into bigger clients, “they risk alienating their small and medium-size clients who can’t afford or can’t scale with Jive’s new value proposition.”

But Zingale was optimistic. He said his company would use the latest round of funding from Sequoia and Kleiner Perkins to organically grow Jive’s sales and software capabilities, as well as to make acquisitions that will help his company grow.

“Our goal is to go as fast as we possibly can,” Zingale said.

Zingale himself, who grew Mercury Interactive into a company with $1 billion in revenue and a $5 billion acquisition and started his career at Intel in 1980, joined Jive in February, and he was also a draw for Kleiner Perkins’ participation in the latest funding round.

“When they got Tony to be the CEO—I’ve known Tony for many years, and he really is one of the premier enterprise software executives,” Schlein said. “That grabbed my attention fast.”

Zingale, meanwhile, said he was attracted by what he calls the “massive opportunity” in bringing the social platform to business software.

“My goal is just to not mess it up,” he said.