As the Buzzient team is getting geared up for Oracle OpenWorld in San Francisco next week, a key question we’re asking is whether Enterprise Social Media is a phenomenon being driven from the West Coast and to a lesser extent, from NYC? Just think, during the “quiet time” of summer, we’ve had over $3B of M&A in the Enterprise Social Sector:
- Vitrue, acquired by Oracle for $300M after raising $30M
- Involver, acquired by Oracle for undisc.
- Collective Intellect, acquired by Oracle for undisc.
- Rypple, acquired by Salesforce.com for undisc.
- BuddyMedia, acquired by Salesforce.com for ~$700M, after raising $100M+
- Yammer, acquired by Microsoft for $1.2B, after raising $100M+
- Wildfire, acquired by Google for $250M
- Kenexa, acquired by IBM’s Social Software division for $1.3B
There’s a pattern developing here. Largely west coast public software companies acquiring largely west coast startups (obviously ViTrue and BuddyMedia as exceptions).
What’s glaring is the lack of acquisitions by Boston-based software companies, and the lack of Boston-based startups. Further to the point, with the exception of General Catalyst’s investment in Vitrue, almost all of the investment in Enterprise Social Media is being driven from the west coast. That’s led us to ask, is Enterprise Social Media a west coast thing? If so, why?
Our experience at Buzzient has been somewhat telling. When we started the company 4 years ago, social media was still in a state of relative infancy, driven by west coast platforms such as Facebook, Twitter, and MySpace (!). At the same time, Boston enterprise software companies, still largely on-premise, were by and large slowing their growth or being acquired themselves by west coast giants. That created a gap, where the linkage of the emerging platform of social to the enterprise market was not a “no-brainer”.
Investors on the west coast saw this gap, and funded companies such as Lithium, Yammer, Jive and others initially in the community space. Later, a wave of investors funded social tools companies, and marketing/publishing platforms for social media. The response in Boston? Largely crickets.
Now, as we prep for our third consecutive Oracle OpenWorld, we expect Buzzient to yet again be one of the only companies in the room started in Cambridge/Boston. The real question is whether Enterprise Social Media companies like Buzzient can/will stay in Boston if all the action is elsewhere? More on this later!