Every week I’ll be reviewing a vendor in the emergent collaboration space and will provide an overview on that vendor which includes aspects from leadership and vision to technology and market focus. If you are vendor that would like to participate, please contact me (email is in the sidebar as is the twitter link). The goal of these posts is not to bash or praise vendors but to simply offer an objective view on what various vendors offer so that YOU can decide if they are a good fit for your business. Every post will cover the same elements for different vendors. If you have ideas or recommendations for other items to be covered in these posts then please let me know and I will consider them.
This week I’m taking a look at Newsgator. Newsgator is headquartered in Denver, Colorado and currently has around 90 employees. I spoke with Melissa Risteff, Senior Vice President, Marketing and Corporate Development and Brian Kellner, Vice President, Development and Product Management.
Overall direction/strategic vision for the company
Newsgator believes that collaboration technologies and the changes in the ways that people work are changing very quickly. This makes it challenging for software vendors who are trying to evolve their platforms continuously. The challenge for organizations deploying these software vendor solutions is that they need to stay up to date on the latest technologies but at the same time they can’t keep deploying point solutions. This is not scalable or sustainable from a business or technical standpoint. So Newsgator’s stance is that companies can instead rely on enterprise platforms like SharePoint and leverage NewsGator as the nimble company to develop and keep up to date on the technology side. Much like an in-house SharePoint innovation team.
Newsgator also sees that the world is drowning with information, especially around unstructured data such as email. They believe that the only way to solve that class of problem is for software to get smarter about you (the employee) and world you live and work in. Companies will continue to build base products and Newsgator wants to handle the more nimble items. Think of SharePoint as the infrastructure or the engine of a car. Newsgator is the petals, the steering wheel, the air conditioning and everything else that makes driving that car comfortable and efficient.
Newsgator is also continuously looking for areas that they can expand to and learning is an area that they are poised to aggressively take on. Newsgator believes in finding ways to help people understand people by building a more complete picture of employees within organizations. Newsgator is also going to continue reaching out to other vendors to be able to pull in their data into Sharepoint. As of now though, Newsgator is still very focused on Sharepoint and the Microsoft platforms. Interestingly Newsgator also see behavioral analytics as an area to get involved in, something I’m hearing from a few vendors.
As far as other vendors in the industry Newsgator believes that if you look at enterprise software in any type of emergent time-frame there are always some small players or point solutions which get swallowed up into larger platforms. Bigger players will keep rolling in the obvious features into their platforms and small players can only survive if they have a clear enough value proposition to deliver something unique. Newsgator has a strategic advantage because they don’t need to worry about what other vendors are doing, they just need to know what SharePoint is doing and where Sharepoing is going. Smaller vendors have a challenge because they are in a whole sea of vendors that they compete with. NewsGator just needs to show they provide enough value on top of a single platform.
Newsgator sees that even in five years there will still be companies doing things the same way they are doing them today. But largely employees will have working interfaces and a great deal of system intelligence that pays attention to a stream of information that humans can’t keep track of. So the platform “knows” what things to introduce to an employee’s view or presence.
Their Social Sites 2010 product is native on SharePoint so it’s using everything it can from SharePoint such as content stores, security, profiles, search and other things. Newsgator as of now appears to be the most integrated product into SharePoint and that also ties into the rest of the Microsoft stack such as Exchange and Lync. Newsgator also has a very rich set of APIs built into the product and is also licensed to other vendors as well. Social Sites also integrates with an Azure-based social mobile app called Glassboard – built by Sepia Labs, a spin-off of NewsGator.
Newsgator also has a News Stream engine whose job is to bring in data from other platforms such as RSS, Twitter, Salesforce.com Chatter, Microsoft Dynamics CRM, and others.
As part of their licensing agreement there is phone and email support as well as a customer extranet community where customers can interact with each other and with NewsGator directly. Standard support is during business hours and is covered by purchase costs. There are also annual support and maintenance costs which run 22% of the annual contract (when the platform is purchased perpetually instead of annually).
There are two ways to license Newsgator, one is a perpetual model which sees additional annual maintenance and support costs. The other way to buy is via a subscription (annual) and all the costs are rolled into single annual fee.
For the full enterprise offering, subscription pricing starts at $1.25 per user per month. If you want the Newsgator base product without any value-add modules, subscription pricing starts at $0.71 per user per month. This is volume-based and tiered pricing exists for enterprise clients. Newsgator also offers perpetual and hosted pricing options upon request.
Maintenance & upgrades
Generally new versions are released around 3x/year and major version 1x/year. There is no charge for full version upgrades; all upgrades are covered. The feature ideas come from four places: customers, from Microsoft (what they get asked to solve in SharePoint that they don’t have a solution for), Newsgator employees, and from what is happening in the consumer world as platforms release new features with new uses cases. Newsgator looks to the consumer web to see what they bring into the enterprise.
Key differentiating factors from competition
- Built completely on SharePoint.
- Depth of Microsoft relationship, great insight into where products are going.
- Have real experience with real enterprise customers with real enterprise deployments – in other words, massive companies around the world.
Customers have tremendous amount of control over the look and feel of Newsgator and a rich set of Newsgator partners can help with pretty much anything. During customization’s Newsgator encourages not to try to change the behaviors of the core functionality because this later poses a challenge for upgrades. Nesgator also allows you to customize where various applications sit within the platform and features simple “turn on and off” functionality and naming of tabs. The good thing is that customers are not tied to SharePoint structure.
Time to go live
The technical side takes less than one hour to get up and running. Large deployments can take several hours. Features, governance, etc can take as long as the organization wants it to take. Newsgator Can take several weeks to fully customize or a day, again this really depends on the organization.
The basic Newsgator architecture is a managed service application. This is exactly how SharePoint is built. All data is stored on SharePoint their security is the backbone for everything. Newsgator also leverages Sharepoint search, sites, lists, and libraries. Newsgator as a platforms is written in .NET technology and is pretty much as close to what you would want SharePoint to be out of the box. Customers don’t need to buy separate database licenses and Newsgator leverages all of the existing architecture of SharePoint. Finally, Newsgator offers both cloud and on-premise deployments but most customers choose an on-premise deployment.
Newsgator is really focused on enterprise customers. Their smallest implementation is about 250 seats and their largest is over 300,000 seats. 70% of revenue comes from deployments of 10,000 seats or more and 50% of that is 50,000 seats or more. Newsgator has a very strong footprint in financial services which continues to trend as well as CPG (consumer packaged goods), professional services, high-tech,manufacturing, government, and life sciences.
Capabilities (customer, partner, employee collaboration)
Focused on partners and employees but sees the customer space as something that they can easily move into.
For those of you who have used Sharepoint you will know that the platform itself is how shall I say…not the greatest in the world in terms of usability and features. Newsgator is what makes Sharepoint a usable and feature rich emergent collaboration platform. In fact, I’ll even go so far to say that using a full deployment of Sharepoint without Newsgator is not a good idea (unless another platform can do what Newsgator can or unless you spend time customizing the heck out of it yourself). I think that JB (the CEO) and his team made a very smart strategic decision to build on top of a platform that is needless to say, not great out of the box. By doing this they have effectively eliminated a fair amount of their competition as they no longer need to worry about what other vendors in the industry are doing. But this is also a bit of a double-edged sword as Newsgator can only work on top of a single platform. To clarify, Newsgator is not a standalone solution, it is a platform built on top of Sharepoint. This means that no Sharepoint means no Newsgator which is a bit limiting from a growth standpoint.
One challenge that I see though is that customers who purchase Sharepoint will now need to fork over additional cash to make their platform usable. Imagine purchasing a gym membership, you walk into the gym and see a few treadmills, a couple machines, and some bikes. You walk over to the sales rep and say, “hey were are the free weights, the sauna and steamroom, the locker room, the yoga studio and the free weights?” ”I’m sorry says the sales rep, that’s going to cost you a bit more.” Sure it’s not exactly the same thing but you get the idea. Another challenge I see is that even though Newsgator itself might make the platform easy to use and more robust, Sharepoint still requires that it be managed and supported by a dedicated IT team, I’ve spoken to several Sharepoint customers who tried using Sharepoint only to realize that they couldn’t dedicate the man hours to make it work. The flip-side to this argument though is that if you don’t have a dedicated IT staff in place then you probably aren’t a large enterprise and hence not a Newsgator target customer.
Now the good thing is that many enterprise customers who use Sharepoint most likely have a relationship with Microsoft and so they get their products at a discounted price, this takes some of the edge off when adding Newsgator. Another strong point here is that when IT sits at the negotiation table you can bet that they are going to be quite comfortable with using Newsgator since it is going to leverage the security of Sharepoint, a platform which the client is already using.
I think Newsgator may also venture down the road of doing what they are doing for Sharepoint but for other vendors as well, perhaps for Cisco’s Quad or IBM’s Lotus suite. I also wouldn’t be surprised if Microsoft acquired Sharepoint within the next 18-24 months and branded them as a type of Sharepoint innovation/customization arm of the company (or if a competitor acquired Newsgator just to kill them off and kill the product to hinder Sharepoint, I know, evil thought). Newsgator also alluded to a future geared towards more learning and behavior analytics which also makes complete sense. If customers are deploying Newsgator then Newgator is able to see how the employees are using the platform and they can collect and analyze all sorts of interesting data around how employees communicate and/or collaborate in affect developing what I call “smart collaborative platforms.” These customers are large enterprises so the data there is going to be quite rich.
Now another interesting things to note is that most of the Newsgator deployments are on-premise and they have a strong footprint in regulated industries such as financial services and government. Companies in this arena are required to keep data on-site and so these organizations will not be able to deploy cloud based solutions. However, a part of me wonders how many of these organizations which are deploying Sharepoint and Newsgator are also deploying some of the smaller cloud-based vendors out there as well, perhaps within teams, or perhaps integrating them in some way into Sharepoint. Keep in mind that what Newsgator is doing as far as their platform goes isn’t in and of itself revolutionary, and I don’t mean that in a negative way. The genius of the model is that they are adding features and capabilities to Sharepoint that you would EXPECT to see in an emergent collaboration platform but don’t such as microblogging.
Many of these features (and far more) already exist in virtually every other emergent collaboration vendor but what Newsgator realized is that they can piggy-back into organizations and sell a better version of something that companies are already using. In other words they don’t need to convince organizations of the value of using something like Sharepoint which is a challenge that many other vendors have when they are selling into organizations that currently don’t use any emergent collaboration solutions.
So overall I think that Newsgator is really a must for any enterprise organization wishing to get value out of Sharepoint. As far as the future of Newsgator goes I think they will either be acquired or they will expand their offering to move beyond just Sharepoint. Watch for a strong push in the behavioral analytics and learning spaces with the goal of becoming a “smart platform” and also keep an eye out for potential partnerships to build on top of other large emergent collaboration vendors. Newsgator might also expand their feature set to get more involved with customer facing communities as well, something that Sharepoint doesn’t allow currently but for which there is a great demand for, in fact I would be surprised if Newsgator didn’t add this functionality at some point in 2012 or early 2013. Many organizations are looking for single platform solutions which can not only allow for employee collaboration but also for customer collaboration. Chances are that all of Newsgator’s clients are also using another vendor for their customer community initiatives, a market which Newsgator can easily take a piece of.
(Cross-posted @ Social Business Advisor: Social CRM and Enterprise 2.0)