UPDATED 04:17 EST / APRIL 13 2011

Preparing for IPO Jive Software Buys Startup Proximal Labs – Forms Big Data Dream Team

On the heals of the news that Cloudera is extending their lead in Hadoop, a Cloudera Labs startup gets bought by pre-IPO startup Jive Software.

Jive Software, located in Palo Alto California, is announcing a big data technology acquisition of unknown startup Proximal Labs. Proximal Labs was founded by David Gutelius, Lance Riedel, and Nigel Daley getting full time operations going this past January. I had a chance to get some exclusive video coverage from the top computer science brains behind the deal – Jive’s SVP Engineering Brian Roddy and Proximal Labs CEO David Gutelius (see below). It was a great chat.

According to Proximal Labs web site their mission is to “supercharges online communities with applications that anticipate & target user needs, adapt to change and create spectacular community engagement.”  Proximal uses cutting edge methods in machine learning and data mining to power an array of applications that plug into any social media platform. The apps constantly learn to improve what they do over time and adapt to users’ preferences and interests.  The team is considered to be A-players in the Silicon Valley entrepreneurial circles.

Jive have been makes some stellar news lately. They recently added some high-tech heavyweights to its board of directors as a classic sign of an IPO. Some big names to be added to an already good list. The new directors are Charles Robel, former chairman of Santa Clara-based McAfee; David DeWalt, president of McAfee; Jonathan Heiliger, VP of technical operations at Palo Alto-based Facebook; and Sundar Pichai, of Google who was recently promoted by Larry Page to SVP of Chrome.

Proximal put together a stellar team of seasoned execs in computer science and social science and recently were selected by the elite Cloudera Labs startup and alliance program in Palo Alto. The founders including Nigel Daly are a big time contributors to Hadoop.

The combination of Jive Software’s team and Proximal Labs creates a big data dream team for Jive. The new big data dream team is a nice feather in Jive’s cap as they prepare to go public. Board of Google and Facebook execs now big data team. Ah ha…

The combination gives what Jive needs a big data dream team. Jive has been growing rapidly and is “busting out at the seems”. Their engineering team is strong, but like any growing company they can get lost chasing those tactical challenges that all business have servicing clients.  The fact is Jive just didn’t have the time to make the investment in big data.  Proximal Labs solves that problem. Nice move by Jive. Yammer has to be bummed.

Buying Proximal is a great move on two fronts: 1) takes a solid (hard to replicate) team off the market who might get bought by competitor (or become a competitor to Jive themselves) and 2) Jive product platform gets a big boost with a clear big data technology and team. We all know how noisy the social environments can be. Proximal will help Jive find the signal in the sea of data noise.

Jive Software is one of the hottest startups in Silicon Valley. Although Facebook and Twitter (consumer companies) get all the attention (and hype), the enterprise business is smoking hot right now. Jive’s software is changing how enterprises work and collaborate.

With all the speculation about Jive going public, they need to solidify their core engineering roadmap. Proximal gives them a big time talent acquisition with the right team at the right time. For Jive this is more than about buying a recommendation engine technology. Using big data Jive now can tackle big problems using big data.

More importantly as the “flow” or “noise” increases there is a need for “smart filters” in these social platforms. This is where Proximal Labs fits with Jive’s product direction. Community and collaboration increasingly happen in unexpected places, across boundaries, groups, and even sites. While Jive can easily serve internal communities, Proximal offers the option of integrating relevant external Web content into Jive’s core platform. This allows Jive’s customers and their communities to interact with highly relevant information and groups outside their organizations and can spark new kinds of collaboration in their communities. Proximal in essence modernizes Jive’s social platform.

I had a chance to sit down with the cofounder of Proximal Labs David Gutelius and Jive’s SVP of Engineering Brian Roddy for an exclusive interview to talk about the acquisition and the long range plan for Jive Software and big data.

Proximal Labs made their bones by being both in the right place at the right time with the right talent. All the founders have years in the field of computer science and internet infrastructure including social science. Proximal Labs was a typical startup story. They were self funded by the founders and their first paying customer was Jive Software.

Before Proximal could even get meetings with venture capitalists Jive made them an offer that they couldn’t refuse. Jive declined to disclose the amount of the transaction, but I estimate that the deal had to be around 20 million.

As Brian Roddy SVP said that Jive was working a first pass recommendation engine then realized that they needed was scientific and engineering background to do deep social network analysis and scale the systems currently in place. According to Roddy, Jive looked at over 50 companies before settling on Proximal Labs.

As part of the acquisition CEO and cofounder of Proximal Labs David Gutelius will become Jive’s chief social scientist.

In his new role, David will drive the enterprise social graph strategy and overall technology innovation at Jive.  Additionally, I had a chance to visit the company the team is taking over the basement floor to build out their own big platform play.

Interview with Jive SVP Engineering and CEO of Proximal Labs


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