Collaboration tools are all the rage in office applications these days, and they come in many forms. There are platforms through which one can share and collaborate on many kinds of files. Box comes to mind. Then there are the cloud applications like Salesforce.com and Workday, all of which are collaborative. Social enterprise apps like Jive and Yammer are built expressly to encourage collaboration. Google Apps has recreated a solid set of core office applications, all accessible directly from a browser, and all of them allow multiple editors on documents.

Smartsheet is essentially a spreadsheet application that’s built for the age of the cloud. Entire sheets can be shared with colleagues, or you can share only granular bits of data, like the contents of a particular row. Sheets can be published to the Web, and are also accessible via mobile apps on iOS and Android. It integrates with Box, Salesforce, Google Drive and Amazon Web Services.

So far, it has a million customers, including companies as varied as ESPN, MetLife and Toshiba. Many of those just found Smartsheet and started using it for a particular project or task, and its use grew virally within those companies. One of them was Insight Venture Partners. And, of course, you know where this is going. In a moment worthy of a Victor Kiam, they liked it so much they’ve bought a piece of the company.

Insight announced today that it has led a $26 million investment in Smartsheet, along with Madrona Venture Partners. Ryan Hinkle, a principal at Insight, will join Smartsheet’s board of directors. The funding will go toward accelerating sales and marketing, and to kick software development efforts up a notch or two.

While it is one of the largest consumer electronics and mobile companies in the world, Korea’s Samsung has a relatively quiet profile in Silicon Valley.

In fact, while it has had a longtime facility in San Jose for two decades, its execs are not well known to many except the top echelons of the tech sector here and Samsung’s interactions with the entrepreneurial culture have been decidedly low key.

No longer, it seems.

Besides a previously announced new 8.5-acre campus in Mountain View for its U.S. research and development center, slated for completion in 2014, sources said the company is close to signing a deal for a prominent venue in downtown Palo Alto that will house a start-up accelerator.

The location that the company is now negotiating is the second floor of the former Borders Books space on University Avenue. The historical property has a splashy movie marquee, since it used to house the Varsity Theatre.

It’s not quite Oppa Gangnam Style, it is a big move for Samsung.

While it is unclear if the new office will focus on making investments in start-ups or incubating its own innovation, sources said it will be aimed at linking Silicon Valley entrepreneurs and other players more closely with Samsung.

Sources said the move is being spearheaded by a relatively new hire by Samsung: David Eun, who became its EVP to lead a new push to create more media offerings in December. Previous to Samsung, Eun has been an exec at both Google and AOL.

Eun is well known in the Valley already, but a new location that will focus Samsung’s digital efforts should raise the company’s profile with the digerati here.

Also on the docket to do that is Samsung’s other new major facility. In September, right in the middle of its high-profile patent trial with Apple, the company announced that Samsung Information Systems America, its U.S. R&D Center, would expand and relocate to a new campus.

“The R&D Center will provide a state-of-the-art campus that can support the current rapid growth in the organization, and also provide the infrastructure to support Samsung’s open innovation and university collaboration activities,” Samsung said in a press release at the time. “Construction is anticipated to start in the second half of 2013 on the company’s two new six-story class-A office buildings totaling approximately 385,000 sq. ft. and two 5-6 story parking structures, with occupancy expected in 2014.”

In other words, Apple: Samsung is now officially in the house in Silicon Valley.

Yahoo and Facebook are not currently in talks about forming a search alliance or building a search engine together, according to my sources, who scoffed about such a deal reported in a thinner-than-tissue-paper post by the Telegraph earlier today.

In addition, Yahoo is not anywhere near ending its search partnership with Microsoft, although new CEO Marissa Mayer has been in touch with the software giant about improving performance that has been less than lackluster over the course of its history so far.

Despite this, it would be nearly impossible for Yahoo to extricate itself from the long-term contract easily — though there are certain, but very difficult, outs. But sources tell me Microsoft would fight any attempt to end it earlier.

Thus, while Yahoo and Facebook have had a very good relationship of late, after the pair stopped warring over patents, and have also had success with its various sharing initiatives, a substantive search collaboration is not now in the mix.

Could the pair do more in terms of sharing among its users? Sure! Could they more tightly integrate services? Yep! Could they do something jointly related to advertising? Why not! But will they build a search engine together? Not likely.

Indeed, I am not even sure what such a thing means, since it would now be nearly impossible to execute, given Yahoo has outsourced its core search technology long ago to Microsoft and has been largely focused on improving search experience since then.

Of course, it’s no secret that Facebook is likely to enter the search arena in a more substantive manner in the future — CEO and co-founder Mark Zuckerberg has said so publicly — because people expect a better experience and users have been asking for years for improvements.

So watch that space, for certain, as it could also be very lucrative for the company and perhaps give search leader Google a bit more of a race.

But the social networking site is likely to work on its own in such an effort — as well as approach the space in much different ways. Hooking up with Yahoo would bring it almost nothing it might need to make it a success.

There are some interesting what-ifs to ponder with the idea of Microsoft, Facebook and Yahoo forming some kind of Avengers-style effort to battle Google, especially if it had a mobile element. But that’s the movie version at this moment.

(Speaking of movies, I am sorry it took me so long to get to this, but I was seeing the final “Twilight” with some All Things Digital staffers. I can report that the sparkly vampires of the film are also not in search alliance talks with Facebook.)

One unusual phrase in the Telegraph article did catch my eye though, which noted that “board members expect the talks to lead to much more substantial collaboration based around Web-based search.”

Such a Facebook search tie-up rumor would certainly do wonders for a Yahoo stock pop tomorrow for all the hedge funds now piling into the Silicon Valley Internet giant, would that it were so.

But it’s not.

Big management shifts at Apple are now taking place.

Scott Forstall, the man in charge of its iOS mobile software efforts and a major and longtime executive at the tech giant, is leaving next year and will remain an adviser to CEO Tim Cook until then.

In addition, new retail head John Browett is headed out the door.

As part of the move, Apple noted that four key execs — Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi — would “add responsibilities to their roles.”

Ive gets “Human Interface”; Cue will take over Maps and Siri voice recognition responsibilities; Mansfield will run a new unit called Technologies, “which combines all of Apple’s wireless teams across the company in one organization”; and Federighi gets the big job of iOS and OS X.

More to come on what happened, but Forstall’s departure is very big news and a drastic move for such an important player in the tech space.

He had big fans and also many detractors for his sharp-edged personality, as well as what some described as exhibiting “growing open challenges” to Cook himself. Forstall had previously been called “CEO-in-waiting” in one media account in Fortune.

In addition, numerous sources noted persistent tension between Forstall and several other key execs, especially the powerful design chief Ive.

Veiled internal politics at Apple aside, Forstall has been a key part of Apple’s success over the last decade, especially in the development iPad and the iPhone.

Recently, there has been some level of ire at Apple over the troubled rollout of its own mapping software and the replacement of Google’s popular service, which was Forstall’s responsibility. (No, this move does not mean everyone gets Google mapping back, as one person asked me.)

Browett’s leaving is a little less of a surprise. Since he got the job, he has alienated many within the highly successful retail organization at Apple, many sources said.

His departure comes less than one year after the former Dixons CEO was hired by Apple to succeed Ron Johnson, who left for J.C. Penney in November 2011. Recently he’s been criticized by some Apple Store employees for unfriendly policy changes aimed at increasing Apple’s retail profit margins.

More to come, obvi, but here is the official press release from Apple, which it put out with the most understated title of all time:

Apple Announces Changes to Increase Collaboration Across Hardware, Software & Services

Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi Add Responsibilities to Their Roles

CUPERTINO, California — October 29, 2012 — Apple® today announced executive management changes that will encourage even more collaboration between the Company’s world-class hardware, software and services teams. As part of these changes, Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi will add more responsibilities to their roles. Apple also announced that Scott Forstall will be leaving Apple next year and will serve as an advisor to CEO Tim Cook in the interim.

“We are in one of the most prolific periods of innovation and new products in Apple’s history,” said Tim Cook, Apple’s CEO. “The amazing products that we’ve introduced in September and October, iPhone 5, iOS 6, iPad mini, iPad, iMac, MacBook Pro, iPod touch, iPod nano and many of our applications, could only have been created at Apple and are the direct result of our relentless focus on tightly integrating world-class hardware, software and services.”

Jony Ive will provide leadership and direction for Human Interface (HI) across the company in addition to his role as the leader of Industrial Design. His incredible design aesthetic has been the driving force behind the look and feel of Apple’s products for more than a decade.

Eddy Cue will take on the additional responsibility of Siri® and Maps, placing all of our online services in one group. This organization has overseen major successes such as the iTunes Store®, the App Store℠, the iBookstore℠ and iCloud®. This group has an excellent track record of building and strengthening Apple’s online services to meet and exceed the high expectations of our customers.

Craig Federighi will lead both iOS and OS X®. Apple has the most advanced mobile and desktop operating systems, and this move brings together the OS teams to make it even easier to deliver the best technology and user experience innovations to both platforms.

Bob Mansfield will lead a new group, Technologies, which combines all of Apple’s wireless teams across the company in one organization, fostering innovation in this area at an even higher level. This organization will also include the semiconductor teams, who have ambitious plans for the future.

Additionally, John Browett is leaving Apple. A search for a new head of Retail is underway and in the interim, the Retail team will report directly to Tim Cook. Apple’s Retail organization has an incredibly strong network of leaders at the store and regional level who will continue the excellent work that has been done over the past decade to revolutionize retailing with unique, innovative services for customers.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

But when you’re a company with a lot of industrial-grade Internet infrastructure, including, say, a few of your own data centers, the rules can change a little bit, and you have the option of being a little more selective in determining how your data flows. And when you’re the Enterprise cloud and file-sharing and collaboration outfit Box, you turn that advantage into something your far-flung customers can take advantage of.

When file are big — and in business, they always are — and you need to share something, uploads can be a time-consuming pain in the neck. So Box today launched a network of what it calls Box Accelerators. A network of servers distributed around the world, they serve as outposts for Box’s primary data centers. Box customers around the world will be able to upload to these Accelerators, and thus speed things up, say CEO Aaron Levie. In some cases, Box is bringing to bear its relationship with Amazon Web Services, and that company’s global footprint.

“We’re making a big push on international expansion,” Levie told me in a conversation at Box’s Los Altos, Calif., headquarters last week. Over the summer, the company opened a new office in London, and announced plans to hire 100 people there, in order to double down on opportunities it sees in Europe.

Media companies, health-care companies, and companies and institutions engaged in scientific research often have to move large, cumbersome files around in order to make them available for collaboration with colleagues. The primary factor in slowing down that process is distance. For all the vaunted rhetoric of how the Internet makes the world a smaller place, when it comes to moving gigabytes or more at a time, the one thing standing in your way is the distance between you and the server you’re uploading to.

The network of Accelerators are intended to shorten that distance. Box customers will get a choice of servers closest to them, and those servers in turn will have an easier time of communicating with Box’s main servers at its network of data centers, including a newish-one in Las Vegas, and another two in California.

The service is going live in nine different regions around the world on every continent except Africa, and is available free of charge for existing Box customers. And while today the network is specified only for uploads, it will in time enhance the speed of downloads as well, Levie told me. And it will also be addressable by Box’s API, meaning that if you’re building an application that takes advantage of Box’s network, the accelerators will be available for use.

I took advantage of a few minutes with Levie to ask him about his reaction to last week’s disclosure by Salesforce.com CEO Marc Benioff at the TechCrunch Disrupt conference that he’s close to announcing a service called Chatterbox that will essentially compete with Box. Benioff will likely talk in detail about Chatterbox in his keynote address at Salesforce’s Dreamforce conference on Wednesday. Expect collaboration and file-sharing to become part of Salesforce’s Chatter social platform soon.

Levie said he’s known about Salesforce’s intentions in this area for about four months to six months. “We’ve known about it, frankly they kind of have to do it,” he said. “If you think about Chatter, and Jive, Yammer, that kind of social world, it necessarily has to connect up to your content. And Salesforce is trying to carve out the space that Chatter can play in. It’s not enough to be a standalone social platform. Salesforce has basically realized that Chatter has to be able to solve more problems for the enterprise before they can have a serious conversation with a CIO.”

Content that companies share both internally and with partners, vendors, suppliers and customers has to be enhanced with social collaboration features. This is the very essence of companies like Jive and Yammer, and Salesforce’s product in this area known as Chatter. “Salesforce will take what it has as a social platform and add content to it,” Levie said. “What we’re doing is more like the inverse. We have a content platform, and we bring social aspects to it, where relevant. We work with all of the social platforms out there, and we’re going to be building more collaborative capabilities into Box.”

You might think this would be a tad awkward, given the fact that Salesforce is an investor in Box, and is even said to have offered to acquire Box last year, for north of $500 million.

Not at all, Levie says. “There are lots of precedents for companies being both investors, partners and competitors.” To me, it sounds like a diplomatic way of saying “game on.”

The idea is to let companies create their own environments where they share information internally and with partners and customers of their choosing. Exposing business processes to the kind of social flows that we’ve become accustomed to on Facebook and Twitter allows vendors and customers to participate in discussions more readily. As Salesforce puts it, this amounts to “breaking down the boundaries of the business.”

Most products that bring companies into the same place with the other entities they do business with are focused purely on the conversation, or on getting transactions done. Communities, Salesforce says, will let them do a lot more.

Deploy communities to support any business process — from franchises sharing best practices, to high-end retailers delivering custom shopping experiences, to universities looking to connect students with alumni.

If it sounds a lot like Chatter, it should, though that brand name appears almost nowhere in the announcement. It’s being run by Doug Bewsher, Salesforce’s SVP for Chatter. But the fact is that Chatter isn’t quite getting the traction that companies like Jive and Yammer are getting.

Salesforce’s news happened to drop on the same day as word of a major upgrade from Yammer, which is in the process of being absorbed into Microsoft. The software giant said in June that it would pay $1.26 billion for Yammer.

Among the new features is an in-box that gives the user a quick glance at new messages meant for their eyes, including mentions, group messages they’re included in and private messages. Another is a homepage view that, at a glance, gives you a look at what people in your company are buzzing about and what files are being actively shared.

There’s also a “presence” feature that indicates when someone is online at that moment, so you can start a conversation with them; you can easily add more users to the conversation as needed.

As you may remember, Yammer and Salesforce have a history of being rivals. Last year, Yammer launched a promotional campaign called “Friends with Benefits” that touted the fact that Yammer integrated data from Chatter, though they acted more like Frenemies.

Internet stocks got a much needed boost today, after the market rose to its highest levels in three months on solid earnings reports and less worry about the economic disaster in Europe.

The downhill-sliding of Facebook stopped again today, with a 3.9 percent rise to close at $21.92. While still off more than 42 percent since its May IPO, the social networking giant got itself back on the prettier side of $20.

Content portal AOL also had a 3.7 percent gain, likely due to news of a patent dispute settlement, to close at $33.83. It is up an impressive 124 percent for the year.

LinkedIn, one of the few Class of Web 2.0 winners, rose 2.8 percent to $111.55; the business network is up 77 percent for the year.

Better still: Zynga, which has been suffering badly of late, was up about 8.1 percent to close at $2.94 (the online gaming company is still down 69 percent year to date). The same was true of Groupon, another stock loser of late, with its shares rising more than 10 percent to $7.25, which is still down 65 percent for the year.

Also up strongly was recommendations site Yelp, which gained 8.7 percent to $25.43.

Also up smartly: Travel site Kayak, up 4.2 percent to $32.68; video service Brightcove, up almost 6 percent to $14.74; reservation site OpenTable, up 1.9 percent to $40.29; music streaming service Pandora, up 2.5 percent to $9.79; and collaboration software company Jive, up just over 2 percent to $19.11.

In contrast, Internet giant Yahoo gained less than a half of a percent in today’s trading, though it did finally remain above the $16 price barrier to close at $16.04. It is down a little more than a half of a percent for the year, despite the recent splashy hiring of new CEO Marissa Mayer.

Google, too, saw only a quarter percent rise, to $642.82. The search giant is also down a half of a percent for the year.

But there no reason that the ability to collaborate and give quick feedback on a project can’t apply to specialized industries, and actually make a difference within specialized applications. Case in point: Autodesk is set to announce a batch of new features in its AutoCAD WS software that bring a Facebook-like activity feed into the arcane world of computer-assisted design software.

About a year ago I noted the release of AutoCAD for devices running Google’s Android mobile operating systems, which came after a successful launch on Apple’s iOS. Today, the company says its AutoCAD 1.5 allows CAD designs to be seen and shared both in a regular Web browser and on those mobile devices. And a new feature it calls Design Feed makes it easy for people working on a project to comment on its different aspects and have that feedback show up in a Facebook-Timeline-style feed.

One interesting trick: If you’re trying to make a point clear, you can snap a photo of what you mean — say, different options for a door handle on the design drawings for a car — and “pin” them to specific areas within the drawings, just as you might do on Pinterest.

Another application has some added social features, too: Autodesk 360 Mobile is getting its own social feed, making a collaborative design review process easier.

And while it all sounds kind of arcane, make no mistake: This is some widely used software. AutoCAD has 10 million users, and the mobile applications on iOS and Android have been downloaded more than eight million times. And for that matter, Autodesk apps don’t do so badly on the Mac, either. I’m not a designer or architect, but numbers like that make me wonder what I’m missing.

(Image from this Autodesk site showing AutoCAD WS in action on an iPad.)

I could tell you that the company does real-time collaboration; meetings, complete with video and the ability to share what’s on the a computer screen; that the technology is both incredibly flexible and incredibly robust; and that the meeting doesn’t crash even if the host loses connectivity (which, oddly enough, happened during the demo). I could tell you that it works on iPhones and iPads.

And yes, you’d probably say you’ve heard all this before. Cisco Systems has WebEx and Citrix has GoToMeeting and, frankly, I spend far too much time attending virtual meetings on those platforms, which haven’t evolved or improved in any meaningful way since, well, since ever.

But you don’t have to believe me: Perhaps you’ll think I’m on to something when I tell you that Index Ventures and Khosla Ventures have just teamed up to make a $20 million Series A investment in FuzeBox. Mike Volpi, a partner at Index, is joining the FuzeBox board of directors.

Jeff Cavins, FuzeBox CEO, kept me interested in the demonstration well past the point at which I usually tell companies to wrap it up. We watched some HD video footage together, and at one point he gave me control of the video — he was in his office in Silicon Valley, and I was in my apartment in New York, so that I could scroll back and forth to different points in the footage, as if we were talking about edits we’d like to make. No herky-jerky waiting for the video to catch up, just smooth scrolling back and forth.

FuzeBox’s secret appears to be the ability to adapt on the fly to the bandwidth conditions of the people using it. You might be on an iPhone, with just a 3G network handy. Or you might be at the office, on the super-fast corporate LAN, or on the Wi-Fi network at home.

Its customers include Amazon, CBS, Verizon Wireless — which also resells FuzeBox to its business customers — and Thomson Reuters. FuzeBox is used to run 78,000 remote meetings per day and has been used in 122 countries.

Basically, if virtual meetings were more like FuzeBox, I wouldn’t hate them nearly as much as I do. That tells me that the established players need to have their worlds rocked by new, cooler, more capable competitors. Watch out, WebEx and GoToMeeting: FuzeBox is coming.

Rumored for awhile, word of the deal started to leak on Twitter and elsewhere about two weeks ago. Buzz picked up considerably around the same time that Yammer CEO David Sacks held a huge 40th birthday party at a rented mansion in Southern California.

Yammer will become part of the Microsoft Office Division, run by Kurt DelBene, though the Yammer team will continue to report to Sacks. The plan calls for Yammer to stick to its current track of developing its own service, while Microsoft pushes ahead to nudge further adoption alongside SharePoint, Office 365, Microsoft Dynamics and Skype.

Initial speculation about the deal pushed shares of Jive, Yammer’s primary rival, up considerably. Following the standard “buy on the rumor, sell on the news” pattern, now that the rumor has become news, shareholders are bailing out and Jive shares are down about 5 percent to $19.45 as I write this.

Launched in 2008, Yammer has been the most promising of the social enterprise companies not named Jive. Last February, it raised a fifth round of funding — $85 million led by Draper Fisher Jurvetson, at an implied valuation of about $1 billion $600 million.

Update: I’ve just heard from someone familiar with the February funding round that Yammer was valued at $600 million, or about half of today’s purchase price. No wonder Yammer’s employees were so giddy they couldn’t contain themselves at The Creamery.

Meritech Capital Partners, Jeff Skoll’s Capricorn Investment Group and Khosla Ventures also participated in that round. Prior investors include Charles River Ventures, Emergence Capital, Founders Fund, the Social+Capital Partnership and US Venture Partners; the angel investors are Bill Lee, Max Levchin and football great Ronnie Lott.

Coming as it did on the heels of Jive’s late 2011 IPO, conventional wisdom suggested that Yammer would follow and go for an IPO of its own.

But after that funding round, Yammer followed none of the usual steps associated with a pre-IPO company: While Sacks is a former PayPal executive, there was no effort at Yammer to recruit additional directors with public company experience.

The first few paragraphs of the official announcement are below. There was one acquisition — the British software firm OneDrum — but it was pretty small. There was no chatter about bankers or an S-1 filing with the U.S. Securities and Exchange Commission. Lacking all of that, it was pretty clear that a buyout was the more likely scenario.

Yammer can’t have ended up in better hands: A cash-rich owner with time on its hands. For all its vaunted popularity among large companies — you can’t have a conversation about it without running into its well-worn stat that it has five million users at 85 percent of the Fortune 500 — Yammer has a famously difficult time converting its free users to paid users. More often than not, a handful of employees will adopt it, with varying levels of success in integrating it into their workflow. Many just experiment with it and then never take to it.

Those who do like it usually find that the free version is sufficient. By Yammer’s own admission, its conversion rate is about 20 percent. That means that, of those five million users, a mere one million are paid users.

Jive, on the other hand, lets companies try its services out free for 30 days, then they have to start paying. While it doesn’t disclose the total number of individual users, it has 676 companies using its service and software, all of them paid.

Microsoft to Acquire Yammer
June 25, 2012
Microsoft extends cloud services with best-in-class enterprise social networking.

Here’s the official announcement:

REDMOND, Wash., and SAN FRANCISCO — June 25, 2012 — Microsoft Corp. and Yammer Inc. today announced that they have entered into a definitive agreement under which Microsoft will acquire Yammer, a leading provider of enterprise social networks, for $1.2 billion in cash. Yammer will join the Microsoft Office Division, led by division President Kurt DelBene, and the team will continue to report to current CEO David Sacks.

“The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love,” said Steve Ballmer, CEO, Microsoft. “Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services.”

Launched in 2008, Yammer now has more than 5 million corporate users, including employees at 85 percent of the Fortune 500. The service allows employees to join a secure, private social network for free and then makes it easy for companies to convert a grassroots movement into companywide strategic initiative.

Yammer will continue to develop its standalone service and maintain its commitment to simplicity, innovation and cross-platform experiences. Moving forward, Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.

“When we started Yammer four years ago, we set out to do something big,” Sacks said. “We had a vision for how social networking could change the way we work. Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we’ll need to scale and innovate.”

The acquisition is subject to customary closing conditions, including regulatory approval.

No one authorized to speak for Yammer is talking about this. I will say that a lunch meeting I had scheduled on Tuesday in New York with Yammer co-founder Adam Pisoni was suddenly canceled because of what I was told was a “personal emergency.” It could be coincidence, but then again it might not be.

Another bit of color I’ve heard — and again it may not mean anything — is that Yammer CEO David Sacks has invitations out for a big 40th-birthday bash in Southern California this weekend, at which rapper Snoop Dogg is expected to perform. Whether or not Sacks will be celebrating the sale of his company is still uncertain, but there’s a lot about the speculative story in Bloomberg — which cites two people familiar with the talks — that makes sense.

Outwardly, Yammer has looked to be the most promising of the social enterprise software players that are not named Jive. In February, it raised $85 million in a fifth round of funding led by Draper Fisher Jurvetson, at an implied valuation of about $1 billion. Meritech Capital Partners, Jeff Skoll’s Capricorn Investment Group and Khosla Ventures also participated in that round. Prior investors include Charles River Ventures, Emergence Capital, Founders Fund, the Social+Capital Partnership and US Venture Partners, and the angel investors are Bill Lee, Max Levchin and the football great Ronnie Lott.

That round of funding came on the heels of the late-2011 IPO of rival Jive, whose market capitalization as of Wednesday’s close was $1.03 billion. Lots of people got rich in that offering, especially founders Bill Lynch and Matthew Tucker, and CEO Tony Zingale.

Jive had followed a fairly specific path to going public, which Yammer could have followed, but hasn’t. For example: Before raising a $30 million funding round led by Kleiner Perkins in the summer of 2010, Jive had tapped Zingale, the veteran CEO of Mercury Interactive, who saw that company through its $4.5 billion sale to Hewlett-Packard.

Later, in early 2011, Jive added directors with public company experience to its board; then it set about making some important acquisitions, among them Proximal Labs, an “acqhire” deal; and then OfficSync, a deal that gave it crucial plug-in technology for Microsoft Office.

Yammer has done nothing like this, with one exception: Its April acquisition of the British start-up OneDrum looked an awful lot like Jive’s acquisition of OfficSync. Otherwise, there have been none of the classic pre-IPO signals from Yammer: No high-profile additions to the board, no more acquisitions, no chatter about bankers competing to lead it through the S1 filing and road-show process. When asked about his interest in doing an IPO, Sacks would, in conversations with me, tend to simply avoid the subject. A billion-dollar exit now would seem mighty attractive to Sacks and Yammer’s investors, rather than the uncertainty of an IPO in a shaky market, coupled with a head-to-head-to-head competitive slugfest with Jive and Salesforce.

Then there’s the simple matter of business challenges. Yammer is, by all accounts and its own publicly disclosed stats, having trouble converting its free users to paid status. It is quick to brag about its four million corporate users, but they’re fuzzy numbers. Many start using the service for free, experiment with it, but never turn out to be regular, daily users. Fewer still ever convert to paid status. Yammer has said in the past that its conversion rate is about 20 percent, which works out to about 800,000 paid seats. Getting companies to pony up has proven difficult. Jive doesn’t disclose the total number of seats, but it does disclose how many companies are customers: 676 as of March 31, all of them paying subscribers.

If Microsoft proves to be the buyer, then it would give the Windows and Office giant a key piece of technology to offer its enterprise customers. One big argument for the existence of the social enterprise software business is to attack Microsoft’s outdated collaboration software, SharePoint.

The players are many: Aside from Jive and Yammer, there’s Salesforce.com’s Chatter service, which tends to be strong in sales departments where the mainline CRM service is already in use. Other players include Socialcast, owned by VMware; Moxie Software and Atlassian’s HipChat are others.

Once Microsoft gets its hands on it, two things will be true: Yammer, which is generally seen as still being buggy and in need of a lot of smoothing out of its rougher edges, will need some serious investment. The problem is that, even at a $1 billion valuation, Yammer is small enough that it will disappear inside Microsoft.

The other is that the freemium business model will have to go away. With the possible exception of Skype, it’s just not in Microsoft’s DNA to offer an enterprise product for free and leave it to the users to upgrade to the paid version when it suits them. When the rubber meets the road, many customers may dump Yammer in favor of something else. Those who are serious and willing to pay will consider Jive, which would probably capitalize on the opportunity by offering special deals to customers who switch. Those who demand free will switch to something they can still get for free.

We’ll see if this deal materializes. Bloomberg said a deal could be announced as early as today.

Revenues were $11.6 billion, up 6.6 percent from the year-ago quarter, while per-share earnings on a non-GAAP basis were 48 cents, versus 42 cents a year ago, up 14 percent. That’s essentially right in line with what the consensus of Wall Street analysts had expected Cisco to report: $11.58 billion in sales, and 47 cents in per-share of earnings, with a penny-per-share beat on the EPS front.

I’m going quickly through the numbers, but here’s the announcement in full so you can look for yourselves. I’ll be dialing in to the conference call shortly and will be talking to CEO John Chambers after that.

Cisco shares are headed lower in after-hours trading. As of 4:45 pm ET, shares are down 48 cents to $18.30, or 2.5 percent.

Update: Cisco just issued its guidance on the conference call. CFO Frank Calderoni says that Cisco expects to report revenue to grow 2 percent to 5 percent year over year in the fourth quarter. It also expects to earn a gross margin in the range of 61 percent to 62 percent on a non-GAAP basis. Operating margins should be 26.5 percent to 27.5 percent, up about a point from the year-ago quarter. EPS will be 44 to 46 cents a share. The outlook is lower than the consensus of 49 cents.

On this, the shares have continued to fall after hours. Cisco shares are now, as of 5:02 pm ET, down more than 8 percent, or $1.55, to $17.23. Investors clearly don’t like what they see. Tomorrow looks like it’s going to be a rough day.

SAN JOSE, CA–(Marketwire -05/09/12)- Cisco (CSCO)

Q3 Net Sales: $11.6 billion (increase of 7% year over year)

Q3 Net Income: $2.2 billion GAAP (increase of 20% year over year); $2.6 billion non-GAAP (increase of 11% year over year)

Q3 Earnings per Share: $0.40 GAAP (increase of 21% year over year); $0.48 non-GAAP (increase of 14% year over year)

Cisco, the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its third quarter results for the period ended April 28, 2012. Cisco reported third quarter net sales of $11.6 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.2 billion, or $0.40 per share, and non-GAAP net income of $2.6 billion, or $0.48 per share.

“We delivered solid results this quarter with record revenue and non-GAAP earnings per share,” said John Chambers, Cisco chairman and CEO. “We are successfully executing against our long-term strategic plan of growing profit faster than revenue, and in a cautious IT spending environment, we continue to outperform our competitors.”

Chambers continued, “In a world of clouds, video and mobile device proliferations, the role of the intelligent network has never been greater and our value proposition with our customers is the strongest it has ever been. Our vision and strategy is focused on the right market transitions, and I want to thank our shareholders, employees, customers and partners for their ongoing commitment to Cisco.”

GAAP Results

Q3 2012 Q3 2011 Vs. Q3 2011
—————- —————- —————
Net Sales $ 11.6 billion $ 10.9 billion 6.6%
Net Income $ 2.2 billion $ 1.8 billion 19.8%
Earnings per Share $ 0.40 $ 0.33 21.2%

Non-GAAP Results

Q3 2012 Q3 2011 Vs. Q3 2011
————— ————— —————
Net Income $ 2.6 billion $ 2.3 billion 10.9%
Earnings per Share $ 0.48 $ 0.42 14.3%

Net sales for the first nine months of fiscal 2012 were $34.4 billion, compared with $32.0 billion for the first nine months of fiscal 2011. Net income for the first nine months of fiscal 2012, on a GAAP basis, was $6.1 billion, or $1.13 per share, compared with $5.3 billion, or $0.94 per share, for the first nine months of fiscal 2011. Non-GAAP net income for the first nine months of fiscal 2012 was $7.5 billion, or $1.38 per share, compared with $6.8 billion, or $1.22 per share, for the first nine months of fiscal 2011.

A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table on page 5.

Cisco will discuss third quarter results and business outlook in a conference call and webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at http://investor.cisco.com.

Other Financial Highlights

Cash flows from operations were $3.0 billion for the third quarter of fiscal 2012, compared with $3.1 billion for the second quarter of fiscal 2012, and compared with $3.0 billion for the third quarter of fiscal 2011.

Cash and cash equivalents and investments totaled $48.4 billion at the end of the third quarter of fiscal 2012, compared with $46.7 billion at the end of the second quarter of fiscal 2012, and compared with $44.6 billion at the end of fiscal 2011.

During the third quarter of fiscal 2012, Cisco repurchased 27 million shares of common stock under its stock repurchase program at an average price of $20.28 per share for an aggregate purchase price of $550 million. As of April 28, 2012, Cisco had repurchased and retired 3.6 billion shares of Cisco common stock at an average price of $20.47 per share for an aggregate purchase price of approximately $74.3 billion since the inception of the stock repurchase program. The remaining authorized amount for stock repurchases under this program is approximately $7.7 billion with no termination date. During the third quarter of fiscal 2012, Cisco also paid a cash dividend of $0.08, or $432 million.

Days sales outstanding in accounts receivable (DSO) at the end of the third quarter of fiscal 2012 were 31 days, compared with 31 days at the end of the second quarter of fiscal 2012, and compared with 37 days at the end of the third quarter of fiscal 2011.

Inventory turns on a GAAP basis were 11.5 in the third quarter of fiscal 2012, compared with 11.1 in each of the second quarter of fiscal 2012 and the third quarter of fiscal 2011. Non-GAAP inventory turns were 11.1 in the third quarter of fiscal 2012, compared with 10.8 in the second quarter of fiscal 2012, and compared with 10.3 in the third quarter of fiscal 2011.

Select Global Business Highlights

Cisco announced its intent to acquire NDS Group Ltd., a provider of video software and content security solutions. The acquisition is expected to help Cisco’s ability to transform how service providers and media companies deliver next-generation video experiences to subscribers.
Cisco completed the acquisition of privately held Lightwire, Inc. Lightwire develops advanced optical interconnect technology for high-speed networking applications. The acquisition is expected to allow Cisco to deliver cost-effective, high-speed networks with the next generation of optical connectivity.
Cisco acquired privately held ClearAccess, Inc. The acquisition enhances Cisco’s network management capabilities and enables service providers to better deliver, manage and monetize their services.
Cisco announced strategic investments in Brazil to foster innovation, transformation and socio-economic development.

Cisco Innovation

Cisco announced it has updated its cloud-ready switching portfolio to enhance network virtualization with simplicity and scale.
Cisco announced a successful demonstration and validation of its coherent 100G dense wavelength division multiplexing solution, exceeding 3,000 km in reach without the need for regeneration. This distance is 50 percent farther than any non-Raman alternative solution on the market today.
Cisco introduced the industry’s first carrier-grade, end-to-end Wi-Fi infrastructure to deliver next-generation hotspots. The technology is designed to deliver seamless mobile experiences and enables operators to support a continuing expansion of mobile traffic, devices and new services.
Cisco announced innovations across the Cisco Unified Computing System® (UCS) that quadruple memory capacity, double switching capacity and simplify management for large-scale Cisco UCS® deployments.
Cisco introduced new Linksys Smart Wi-Fi Routers with app-enabled capabilities for new home experiences. The three new routers offer wireless performance and support for Cisco Connect® Cloud.
Cisco announced it expanded its small business product portfolio with new wireless access points, routers, switches, unified communications and partner-managed service offerings.
Cisco and NetApp announced FlexPod was the first data center infrastructure solution to be validated by Microsoft for the updated Microsoft Private Cloud Fast Track 2.0 program.

Select Customer Announcements

TELUS announced it has deployed key components of the Cisco Videoscape™ platform to extend its Optik TV services to mobile devices.
Cisco announced it has been chosen by Fastway Transmissions Private Ltd. to facilitate cable digitization deployment across its customer base in India. Fastway is expected to deploy more than two million next-generation digital set-top boxes from Cisco during the next two years.
Magyar Telekom rolled out 4G LTE services with Cisco mobile internet solutions. Magyar Telekom is Hungary’s largest telecommunications company.
IPLAN chose Cisco technology for its newest data center which is expected to be launched in June 2012. IPLAN is a leader in telecommunications and cloud computing services for small and medium-sized businesses in Argentina.
Videotron launched its enhanced illico digital TV service with Cisco’s HD set-top box platform. Videotron is a leading Canadian telecommunications operator providing communications and broadband entertainment services.
Peru Credit Bank implemented the Cisco Unified Communications system to increase business flexibility and reduce costs.
Kabel Deutschland (KD) selected Cisco CRS-3 routers for its Internet Protocol Next-Generation Network core to meet demand for video and broadband services. KD is Germany’s largest cable operator.
Netelligent announced that it will collaborate with Desktone, Inc. to offer cloud-hosted virtual desktops. These cloud-based solutions will include Cisco UCS, the Desktone desktops-as-a-service (DaaS) platform and NetApp storage systems.

Editor’s Note:

Q3 FY 2012 conference call to discuss Cisco’s results along with its business outlook will be held at 1:30 p.m. Pacific Time, Wednesday, May 9, 2012. Conference call number is 888-848-6507 (United States) or 212-519-0847 (international).
Conference call replay will be available from 4:30 p.m. Pacific Time, May 9, 2012 to 4:30 p.m. Pacific Time, May 16, 2012 at 866-493-8039 (United States) or 203-369-1749 (international). The replay also will be available via webcast from May 9, 2012 through July 20, 2012 on the Cisco Investor Relations website at http://investor.cisco.com.
Additional information regarding Cisco’s financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, May 9, 2012. Text of the conference call’s prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with GAAP reconciliation information, will be available on the Cisco Investor Relations website at http://investor.cisco.com.

About Cisco

Cisco (CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

The consensus of Wall Street analysts has Cisco reporting $11.6 billion in sales, and 47 cents per share of earnings.

The big question, writes analyst Sanjiv Wadhwani of Stifel Nicolaus in a note to clients on May 7, will be around margins. Last quarter, Cisco gave guidance for gross margins — a key measure of profitability — with a narrow range of 61.5 percent to 62 percent, while operating margins were guided to the range of 27 percent to 28 percent. Wadhwani thinks that guidance may stand up as pressure on Cisco’s supply chain from the Thailand flooding, favorable pricing on switching products, and a less-aggressive posture from Hewlett-Packard’s networking arm are all providing a little breeze at Cisco’s back.

Yet one product in Cisco’s stable may, in success, be hurting margins overall: Cisco’s Unified Computing and Servers line (UCS) tends to carry a lower gross margin, Wadhwani writes, and so may eat into its overall gross margin. The product line — which combines computing, storage and networking into a single product offered to corporate and service-provider data centers — had 10,000 customers worldwide last quarter, and was showing “positive momentum” in Wadhwani’s checks. “Overall, we believe that there is intense focus on margins internally, which should allow the company to report an in line margin quarter,” Wadhwani wrote.

Cisco has been operating “with more confidence and aggressiveness with its refreshed product line, making it tougher for competitors,” writes Shaw Wu of Sterne Agee in a note to clients issued May 7, and has been a lot of the reason that Juniper and Alcatel-Lucent have missed expectations recently. He expects Cisco to give guidance for the quarter ending in July that’s more or less in line with consensus expectations. He also sees Cisco benefiting from Apple’s next iPhone: “We believe this could mark the fourth quarter in a row where Cisco does not guide down expectations further building investor confidence. We see Cisco benefiting in the second half of 2012 from the continued build-out of 4G LTE wireless infrastructure ahead of the iPhone 5 refresh likely in the September-October time frame.”

I’ll be covering Cisco’s earnings announcement later today. Having dedicated songs to CEO John Chambers two quarters in a row now, I’m going to have to scramble to see what song fits today’s results, because I just know he’s going to ask.

Hollywood will be destroyed and no one will notice. Collaborative storytelling and filmmaking will do to Hollywood what Wikipedia did to Encyclopedia Britannica.

– From Wikipedia founder Jimmy Wales’s keynote address at the Internet Society’s INET convention in Geneva

One of the things the company signaled it was going to do with that money was make acquisitions. Today it announced its first: OneDrum, a British start-up that specializes in making Microsoft Office a lot more collaborative.

Financial terms aren’t being disclosed, and OneDrum is a pretty early-stage company with 10 employees and combined $2 million in capital raised, mainly from angels and Amadeus Capital Partners, a British VC firm. But, the deal is invariably going to be compared to a similar one announced last year by Yammer rival Jive for OfficSync.

I talked to Yammer CEO David Sacks about the deal earlier today and I asked him about the comparison. He said that one thing OneDrum does that OfficSync does not is a level of desktop synchronization that’s comparable in some ways with what you find with something like DropBox. And, it does so without the need for a plugin that might, he argues, mess up how Office runs and which can be difficult to deploy across an enterprise.

Basically, Yammer customers will be able to share and see the contents of the folders they share with other people via Yammer. Also, people can collaborate on Office documents live. Changes are tracked within the Yammer news feed and revisions are stored. Once you drag a document into your Yammer folders, the contents are instantly text searchable from within Yammer.

What OneDrum lacked, Sacks told me, was “a good front end to express the OneDrum technology,” which Yammer will readily provide.

First there was SuccessFactors, which went to SAP for $3.4 billion in December. And last month, Oracle stepped up to take out Taleo for $1.9 billion. These deals took place against the backdrop of the expectation that Workday, another cloud-based HR software outfit that last year raised $85 million at an eye-popping $2 billion valuation, is well on its way to going public this year.

Amid all of this there was a much quieter and smaller deal: Salesforce.com acquired the cloud HR start-up Rypple.

Yesterday, we saw the first fruits of that acquisition, integrated in an impressive six weeks. In one of his heavily produced keynote addresses at Salesforce’s Cloudforce event in San Francisco, CEO Marc Benioff showed off how the Rypple acquisition is being integrated directly into Salesforce’s main service as an add-on app in the company’s App Exchange. He’s something to see in action, and manages to bring together numerous strands as a way of making his arguments for the cloud and the social enterprise.

The video below is about two hours long, but one section caught my attention: Salesforce has landed Hewlett-Packard as probably its biggest customer, and has been talking about it since it last reported earnings. At about the 90-minute mark, Benioff starts talking about Salesforce’s relationship with HP, and chats with HP EVP John Hinshaw. HP will be live on Salesforce.com in May, and will have its entire sales force of 35,000 using it by the end of the year. Look for Salesforce to play up this relationship as often as it can in the coming year.

So what did the critics — and by that I mean the analysts — think of it all?

One key observation came from Karl Keirstead of BMO Capital Markets: “We spoke with HP’s CIO, who said that the recent deal with Salesforce was for sales force automation and partner management modules only and that there was no existing plan to replace Jive Software with Chatter as its employee collaboration platform.” Ouch. Jive: 1. Chatter: Zero. Even so, Keirstead raised his target price on Salesforce shares to $190 from $175, and maintained his “outperform” rating.

Keirstead also said he expects to see Salesforce move into the “social recruiting” space as a natural extension from the Rypple acquisition. I’ve written about one upcoming company in the space, called Jibe (not to be confused with Jive).

Other Wall Street analysts appeared to like what they saw. Brian Schwartz of ThinkEquity Partners conducted a survey of 50 corporate IT managers and found that they plan to increase their spending on Salesforce products by an average of 12 percent this year. That, he argues, could lead to a 30 percent increase in annual billings by the end of the year, when combined with the addition of new customers and gains from other CRM vendors.

Salesforce is winning acceptance in many large enterprises, and that’s a good sign for its business, writes Brendan Barnicle of Pacific Crest Securities in a note to clients today. The social enterprise is real, and Salesforce is playing a pretty big part in making it happen at large companies. “It appears that Salesforce is at a tipping point where deals are getting larger and the product mix is getting more diverse,” Barnicle wrote. Now that Salesforce has 15 million end users at 100,000 customers, it’s starting to upsell those customers on new things beyond its core Customer Relationship Management service, including the new Rypple service, Chatter, and other things. He rates Salesforce a “buy,” with a $200 price target.

Anyhow, here’s Benioff’s keynote from yesterday, if you have two spare hours to watch it:

Video streaming by Ustream

Today, Atlassian will announce that it has acquired HipChat, a maker of a specialized private instant messaging and chat platform aimed at companies. Financial terms are not being disclosed. But it’s pretty apparent the two were made for each other. HipChat has some 1,200 customers, including Groupon, HubSpot and Wired. The plan is pretty simple: Atlassian will incorporate HipChat into its own software. There’s probably a good bit of overlap between them.

HipChat’s three founders — Pete Curley, Garret Heaton and Chris Rivers — are all joining Atlassian. Their history, as described on their Web site, is pretty basic: “We created HipCal. Plaxo liked it so we went to work for them. We created Plaxo Pulse. Comcast liked it, so we went to work for them. HipChat is our current baby.” Now add: “Atlassian liked it, so we went to work for them.”

I talked briefly with Atlassian president Jay Simon yesterday. “None of our tools has a real-time component,” he told me. “They’re all asynchronous. HipChat is going to give us that.”

People often flock to the basic tools, like AOL Instant Messenger or Google Talk, when they need something instant. HipChat does the instant messaging part, but it also has features like chat rooms that remain persistent, which means they don’t blink out of existence when people using them leave. Files can be shared easily, and APIs from other platforms are supported. It’s also secure.

Consider Atlassian a variant on the social enterprise and collaboration trend that’s been rocking the enterprise in recent years, with the appearance of companies like Jive Software, Yammer, Saleforce.com’s Chatter and VMWare’s Socialcast, to name a few. Atlassian’s tools (its main one is called Jira) allow teams of software developers to work together, keep track of what each member of a team is doing, squash bugs and do whatever else it is they need to do. And among its 20,000-odd customers are the kind of companies you’d want to be doing business with: Facebook, Twitter, Zynga, Adobe, LinkedIn and Cisco Systems. Pay attention now, because someone is going to buy this company.

Yesterday, I returned the favor with a visit of my own, and not just on any day, but on the day that the cloud computing start-up that’s growing at the speed of light moved into its new headquarters in Los Altos, Calif. (But really it’s south Palo Alto!)

Box now has 400 people, and they had been badly crammed into its founding offices and spread out between a pair of satellite offices. Now everyone is all in one place. And yes, it looks every bit the young start-up it purports to be, with scooters and hammocks, swings in the hallways and conference rooms named for goofy things. But what do you expect from a company started barely seven years ago in a USC dorm room?

Naturally, I took the opportunity to talk with Levie for an update on Box, the state of its business (hint: Pretty good) and his view of the competitive landscape (hint: Interesting). Also? I rode the slide that dominates the entryway of the new office. Well, it is a fast way to get down to the first floor.

]]> http://allthingsd.com/20120306/a-visit-with-box-nets-aaron-levie-at-his-new-office-video/feed/ 0 http://allthingsd.com/20120213/investors-sure-love-them-some-jive-today/ http://allthingsd.com/20120213/investors-sure-love-them-some-jive-today/#comments Mon, 13 Feb 2012 20:22:34 +0000 Arik Hesseldahl http://allthingsd.com/?p=174104 Shares of Jive are getting a lot of love today, in part because of a positive mention over the weekend by our friends over at Barron’s. As of 2:20 pm ET, Jive’s share price was up 7.5 percent to $18.36, which is nearly as high as it has traded ever, which was earlier today. Not bad for a company that priced at $12 a share less than three months ago.

Jive, you’ll remember, is the social enterprise software company whose cloud-based and on-premise-based software enables employees at large companies to collaborate and share information as readily as they do on Facebook or Twitter. Investors who might have been shut out from Facebook’s IPO filing may want to go after a smaller, more accessible target that’s just like Facebook — social — but which also has a clear, concise and limited mission to make workplaces more productive.

Last week, Jive reported quarterly results for the first time, and there’s certainly plenty to like. Its net loss wasn’t quite so bad as analysts had expected, while sales grew 53 percent and spurred its billings — a key metric for cloud companies who sell their software on a subscription basis — up 46 percent during the year. It signed new customers like Thomson Reuters, Starbucks and Verizon in the last year.

Jive went public late last year, only days before Zynga went, too, and so a lot of people missed out on Jive’s excitement.

All the love from the markets has me wondering who will be next among the cloud companies to take the public plunge. Workday, the cloud-based HR software company run by Aneel Busri, which last October raised $85 million at an implied valuation of $2 billion, was last seen looking for bankers to get it through an IPO sometime this year.

Workday will no doubt get a lot of attention due in no small part to the acquisitions of Taleo by Oracle last week and of SuccessFactors by SAP in December. But it will also get a lot of attention for the fact that many of its most recent institutional investors are the same ones who invested in Facebook: Fidelity, T. Rowe Price, Morgan Stanley and Janus among them. That makes for a nice tasty Facebook comparison right there. We’ll find out soon enough if investors see it that way.

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