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.

Thanks to a heads up from @jstorerj at Mzinga, I watched the debate last night on Current TV.  It streamed Twitter updates marked #current or #Debate08 at the bottom of the scream. This Wired article has the details and video that shows what it looked like during one of the earlier debates.

It was the most fascinating application of Twitter I have seen yet.  Sure, it was full of all kinds of random comments, some hilarious, some obnoxious, but it gave a great vibe of what people were thinking during the debate, at least within the self-selecting population of Twitter users.  It made me feel like I wasn’t watching the debate alone, even though I was.

We’ve been doing some research here on Twitter-for-the-enterprise services, including Yammer, Intridea’s Present.ly, and the recent Signals announcement from Socialtext.  We’ve been playing with Yammer internally, so far mostly as a time waster but I can see its utility and I am interested to see what value we end up getting from it as more users join.

That said, I’m struggling to see how and where the technology eventually ends up in the enterprise.  Is it a stand-alone service that becomes a communication hub?  What will be the relationship with broader RSS aggregation in the enterprise?  Updates made to social software tools or ‘activity streams’?  And what about our current use of IM?  Does this replace, co-exist or intersect in some way with IM?

We’re interested in your comments, since we’re all playing around with this one at the same time it seems.  Has your company started using Yammer or Present.ly internally?  Where do you see it going?

After four and a half days, twenty meetings, one heat wave and lots of hot tea (too much A/C), the second Enterprise 2.0 show is over. It’s a lot to cram into a summary-style blog post but here it goes:

What was interesting (mostly chronological and certainly not comprehensive):

• Microsoft vs. IBM demo-duel on Monday and the buzz that carried through the week about it (people were still asking me today what I thought). General consensus? IBM knocked it out of the park but it probably doesn’t matter too much in the grand scheme of things.
• IBM’s indication that it will include full RSS feed aggregation technology in the next version of Lotus Connections — not the 2.0 version that is just now shipping but the one that is likely to ship at this time next year. Discussions on the show floor last night with some IBM folks lead me to believe there is still some uncertainty as to what this actually means but Jeff Schick, IBM Vice President, Social Computing Software told me in a one-on-one meeting yesterday that IBM will go full-bore into feed aggregation in the next release.
• Demo of NewsGator Social Sites. I’ve seen this before but it was interesting to see it on Monday afternoon, just hours after the Microsoft folks gave what can only be described as a weak SharePoint demo. Why didn’t they show Social Sites, since they included other partner technologies?
• Discussion with Rob Curry of the Microsoft SharePoint team. He noted that for the next version of SharePoint (expected late in 2009 as part of Office 14), they doubled the development teams on ECM and social software. I told him I thought feed aggregation and wikis are the most obvious areas in need of major advancement in SharePoint and he would only say I would be ‘pleased’ with the next release.
• Meeting with Tom Jenkins, Chief Strategy Officer at Open Text. Open Text had a big presence at the conference this year, an indication of the degree to which it has re-entered the collaboration market after several years of near exclusive focus on archiving, records management and compliance. What this means for the company’s SharePoint integration strategy remains to be seen.
• Jabs traded by Sam Lawrence of Jive Software and Lawrence Liu, SharePoint Technical Product Manager at Microsoft on a panel yesterday about social computing platforms. The content itself wasn’t all that interesting but at least Sam added some humor and Lawrence is an eminently good sport.
• Catch-up meeting with Atlassian and a discussion of how Confluence, JIRA and Atlassian’s other developer tools tie to a single sales strategy to technical teams. This was followed in the general ballroom by a session given by Ned Lerner from Sony Computer Entertainment, which showed, among other things, how core Confluence and JIRA are in their game development processes.
• Socialtext SocialCalc — this is interesting though I haven’t yet had a chance to view the demo.
• Open source panel this morning.

What wasn’t:

• Too much discussion of cultural change, barriers to adoption and best practices. These are all useful and much-needed topics, don’t get me wrong. But most of the sessions I joined on Tuesday and Wednesday were variations on these themes. I didn’t go to all of them to be sure, but I went to more than a few and seemed to be hearing much of the same content over and over. As Vishy put it: “If anybody says viral one more time I’m gonna sneeze.”
• I was hoping for more discussion on integration strategies, platforms vs. point tools, profiles / identity management, standards, deployment in customer-facing environments and so forth. A layer or two deeper I guess than most of the sessions went. Maybe next year we’ll all be more able to have those conversations.
• And speaking of next year, there were too many demos and vendor pitches this year that were extremely similar. How many will return next year? Or the year after? For that matter, for how many years will there be an “enterprise 2.0” conference before this stuff just becomes everyday?
• Most of the more technical sessions were held today, Thursday the final half day of the conference after many folks were gone.
• Like last year, most of the sessions were way too crowded with every seat filled. That’s a good thing for the vendors and the conference organizers, but not too comfortable or enjoyable for those in attendance.

That makes a longer list of things that were worthwhile than those that weren’t, making it, I would say, a well spent week. And there were lots of great hallway chats and opportunities to catch up. To anyone I was supposed to meet at some point and did not, please leave a comment or contact me directly.

We’ve been busy lately increasing our coverage of social software vendors. In the last few weeks we’ve spoken with: Awareness, CollectiveX, Communispace, GroupSwim, HiveLive, Jive Software, Leverage Software, Lithium Technologies, Ringside Networks, Socialtext, Telligent Systems, and Wetpaint. Some of these meetings were triggered by new product launches and others were initiated by us, reaching out to begin coverage of vendors we hadn’t spoken with before. Most (but probably not all) of these have or will soon result in new or updated 451 coverage.

That’s quite a list and it’s only a list of who we’ve spoken with recently, not of all the vendors in this market and it doesn’t happen to include any of the larger players like IBM, Microsoft and Oracle.

So you have to ask, where is the differentiation? I don’t think that’s clear yet. Vendors are coming at this market from a particular area — like forums software or wikis — and tend to be targeting a particular types of implementations (BtoC social media vs. BtoE collaboration) so theoretically competitive products can be quite different under the covers (though often quite similar in marketing).

One thing that seems clear is that many vendors already in the social software realm are busy getting more social. By this I mean grafting on “social” aspects a la Facebook. This can be the ability to have user profiles and the ability to friend people or more sophisticated analysis of who knows what in order to connect users with similar knowledge or expertise.

Just a few recent examples:

Jive Software’s 2.0 release beefs up profiling and social networking capabilties.

The 3.0 release from Socialtext does the same.

Telligent added the ability to track activity data by user in Community Server 2008.

Wetpaint also added more social aspects recently.

Leverage Software has some interesting visualization technology applied to social networks.

Ringside wants to link public networks to business networks.

As vendors originally strong in wikis or forums software, for example, expand social networking and add other features, they’re much more in competition with each other than they once were. And organizations are likely to want to standardize to avoid profile proliferation, if nothing else.

I was talking with someone this morning about how many log-ins one large broadcaster has for its various customer/consumer communities (wikis, message boards etc.) and how it’s a high priority item for that company to fix it. That’s something we’ll no doubt hear more about as more and more products go social.