Cloud

Cloud companies need to prove their worth every single month — here’s how they’re trying

Above: From left to right: Ping Li of Accel Partners, Guy Nirpaz of Tatango, Oudi Antebi of Jive at CloudBeat 2013 on Monday.

Image Credit: Michael O'Donnell/VentureBeat
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SAN FRANCISCO — Jive‘s head of product has some advice to share with founders of business software startups: Don’t just focus on product; the go-to-market strategy matters, too.

Onstage at CloudBeat 2013 today, executives spoke about the business model challenges for cloud companies. They discussed how customers love the freedom and flexibility that the cloud affords. That they are not locked into paying hefty annual fees — whether the product provides value or not.

It’s great for customers, but this has led to new challenges for cloud service providers. Cloud companies need to prove their worth every month, or they risk losing customers. In addition, many cloud startups experiment with free trials or freemium models, making it more difficult to make consistent revenues.

Jive senior vice president of product Oudi Antebi offered a few insights on how his company’s strategy to keep customers engaged, and paying for the service.

Customers appreciate that the software “actually makes a positive impact in employees levels of productivity,” he said. Jive is often referred to as the “Facebook for the enterprise” — its collaboration offering competes with giants, like Salesforce Chatter and Microsoft’s Yammer.

Antebi was joined onstage by Guy Nirpaz, Totango‘s chief executive. Totango works with companies like Jive, helping product teams measure how much customers are using the online service and suggesting actions to boost engagement.

More specifically, Totango’s service monitors behaviors that indicate whether a customer is pleased with a service and finds potential problem areas where they are having issues. By identifying these problem areas early, cloud providers can avoid losing customers.

Nirpaz said that companies are operating under the false assumption that a data science team is a requirement. Such a huge investment in talent and resources is no longer necessary. “There’s a lot of new data being generated that could be utilized,” he said.

Jive became a data-driven company a few years ago. Antebi described in broad terms how the company uses data to inform sales, business, and product developments.

For instance, small and medium-sized business customers have increasingly been “opting in” to using Jive. For this reason, the sales team made the decision to expand their scope beyond Fortune 500 corporations.

The team tracked how small businesses are engaging with the tool and built integrations accordingly. While large corporations require a Microsoft Sharepoint integration, small businesses would prefer integrations with Box and Google Drive.

“These were the realizations that were driving us forward,” said Antebi. “The sorts of things they wanted to do with Jive.”