This economy is tough stuff for lots of small software vendors, but perhaps particularly those that are selling “improved productivity” or “enhanced collaboration” in the face of frozen IT budgets.  All is not doom and gloom however.  For example, Jive Software announced today that Q1 was its best quarter ever with 100% year-over-year revenue growth and its second quarter of being cash-flow positive.

Jive seems to be more the exception than the rule though as far as social software goes.  We know Mzinga has had two rounds of layoffs and a CEO change in recent months as it works towards profitability.  Similarly, Socialtext also had a small layoff and took additional funding — taking Socialtext’s total funding to about $18m.

What’s the difference between these vendors?  Some of it is technology certainly, but also a clarity of message.  I think Jive was early to market with what it is now calling “social business software” — in other words, a product that combines functions from multiple point tools (e.g., forums, wikis, social networking).   And Jive is playing in the big leagues versus large vendors selling enterprise deals for collaboration.  Selling deals for external, customer community sites also helps, as some of the external initiatives funded from marketing budgets are holding up better than large internal collab deals.

And from my perspective as an analyst in the content management realm, I also see a lot of WCM vendors coming out with more legit social software products – Day Software and EPiServer are two recent ones that come to mind.  How will these products fare as part of broader WCM suites?  Will they be the de facto choice for customers that use WCM products from these vendors?  Or has the market gone a different direction?  This is something I’ve blogged about before, but the social products from WCM vendors are getting stronger so the issue is becoming more real.

The noise in the enterprise social software market has certainly begun to die down and that is a good thing.  Looking forward to Enterprise 2.0 this year and the chance to hear more about what’s working and what’s not.

We have more year-end financials available this week so we can continue our look at the  health of the WCM market.

Day Software, which is traded on the SIX Swiss Exchange and OTC in the US, released its year-end results today, with total 2008 revenues of CHF 27.8M ($23.9m USD), an increase of 11% from 2007. License revenue grew 8%.  Day continued with a net loss on a GAAP basis, though it had a number of restructuring charges and claimed a return to non-GAAP profitability, when these charges are excluded.  Day released a major upgrade to its flagship CQ5 in Q4, which I would have expected to delay Q4 sales as customers wait for the new version.  So that fact combined with the overall business climate make modest growth from Day unsurprising.

We also get a bit of data from SDL on its acquired Tridion business.  SDL’s year-end results include the note that it had “Tridion revenue growth of 16%.”  Based on data we’ve tracked since SDL acquired Tridion in 2007, we had Tridion bringing in $42m in 2007 revenue, so 16% growth puts 2008 at $48.7m  Growth has definitely slowed for Tridion, which reported 58% growth in 2007 over 2006, but we already knew that since SDL noted Tridion’s first-half 2008 sales grew only 11%.

To me this all seems to point to relatively stable growth in WCM overall.  If we average in the outliers (FatWire/Sitecore and Vignette on the high and low ends respectively), we probably get to low double-digit growth in the 10-20% range, which is pretty much what the sector has been seeing for awhile now.

What about 2009?  Growth may well slow some, but I still don’t see the WCM sector getting hitting particularly hard, as there is still a lot of work to be done on a lot of sites in nearly all verticals and geos.  There may be more opportunities for open source and SaaS players to make some hay with potential cost savings, along with some projects getting delayed, downsized or chunked up, but I see organizations still buying WCM overall.

A related note:  Our recent report on M&A prospects in WCM is available via the New York Times DealBook today.

I just saw the official announcement that Kevin Cochrane has joined Day Software as CMO.  Kevin was an early Interwoven employee, then left Interwoven for Alfresco where he ran product management.  John Newton blogged back in June that Kevin was leaving Alfresco as he wanted to move back to the Bay Area.

Bringing Kevin on board is a coup for Day, but not all that surprising given that Day’s new CEO (since May) Erik Hansen is also ex-Interwoven.  And there are some similarities between Day and Alfresco, as Day does have open source efforts and credibility via the Apache Jackrabbit project and associated Day CRX product.

Still, Day is first and foremost a commercial software vendor with a traditional licensing model, though we have expected for some time that the company might start to more aggressively pursue open source from a business perspective.  Will Kevin lead Day in that direction?

CEO of Ringside Networks Bob Bickel reported on his blog last week that the company is ‘winding down’ and that those involved with the company would ‘move forward.’ The company’s website is still live and an inquiry as to whether or not the company has officially ceased operations has not yet been answered. But it appears that the start-up, which had planned an open source ‘social application server,’ is done. Bickel blames the company’s outcome on distraction due to potential acquisition by a ‘non-evil’ company — he provides some interesting detail, it’s worth a read.

We profiled the company back in April at the time of its fairly high-profile launch (451 Group clients can see that profile here). Its plan, to enable site owners to create mini-apps that would integrate with public social networks like Facebook, seemed a good one and its management team, mostly ex-JBoss and Bluestone Software execs, was certainly experienced.  Our best wishes to Bob and the others involved — I have a feeling this isn’t the last we’ve heard from these guys or, probably, of this software.

This is the second recent enterprise open source social software / collab failure that pops to mind.  I also profiled German start-up Mindquarry last year (here for clients) that had some slick open source team collaboration software with all the social bells and whistles.  It also failed to get sufficient funding and the company founders eventually joined Day Software to develop the (proprietary) social software components of its Web content management line.

Update 9/30/2008 – Bob Bickel wrote to let me know that details on company operations are still be sorted out.  The Ringside open source code is still available on Sourceforge and will continue to be.

No surprise really that social software, social publishing and other types of socializing were hot topics this week at the AIIM show here in Boston. I started out the week at Drupalcon (co-located at AIIM this year), the community event for the open source Web publishing tool Drupal. This was my first time at Drupalcon, or really at any open source user event of this size. A couple things struck me. First and most superficially, I stuck out a bit both due to my rather corporate-looking business attire (sorry guys) and because of my gender — a comment was made at the start of the event that the attendees were 93% male.

But much more interesting was the level of engagement. Cheers and audience participation during the keynote by project lead Dries Buytaert were plentiful. The event was packed (there were 800 attendees and they had expected 500) and there appeared to be a high level of engagement among folks in the sessions and the hallways. (And I wasn’t the only one sticking out for looking a little corporate – I think the guys from Acquia, the new Drupal start-up were in the same boat. 451 Group clients can read our write-up on Acquia here (log-in required)).

AIIM didn’t have the same level of excitement but there was still a common thread between the two events. Part of Drupal’s popularity is due to its community features and the availability of modules to add capabilities like feed management, voting and so forth. Other vendors that fall into a broadly defined content management market are busy adding similar capabilities either to WCM tools that will ultimately deliver community features to site visitors or to content contributor UIs within apps themselves. I met with folks from Day Software, Alfresco, IBM, Salesforce.com and Oracle and support for communities, collaboration and user-generated content are hot topics. Interestingly, it was not a focus during a meeting with Google — no social features appear particularly imminent for Google’s Search Appliances.

I also attended an interesting session held by Tony Byrne of CMS Watch. Tony looked at CMS architectures and how those companies wishing to implement external communities or to support user-generated content on external sites may end up with best-of-breed tools for architectural reasons, even though WCM vendors are adding support for these features themselves. Interesting stuff.

There was no sense of irrational exuberance at AIIM though, not like last year’s Enterprise 2.0 conference that had a jammed showcase floor and overflowing sessions. AIIM is a massive show though and as it is co-located with the On Demand show, it’s an odd mix of photocopiers, printing machines and enterprise software. Several ECM vendors I met with including SpringCM, Xythos (which I found out was acquired by Blackboard last year in a deal that has been kept totally quiet), Hyland Software and Tower Software are much more focused on more traditional ECM problems, from process management to archiving, which are alive and well.