Social Business in 30 Days?

Portraying Try Jive as proof that enterprise software companies are having to adapt to the consumerization trend in which people and organizations demand the right to try software before they buy it, Sacks said this proves the hypocrisy of Zingale's argument that the Yammer strategy is to "hand out a bunch of drugs at the schoolyard, and we'll come back and charge you for them later."

"It looks like he's become a pusher, too," Sacks mused.

This war of words continued even in the context of Jive's earnings call. Although he did not mention Yammer by name, Zingale said one of the distinctions in Jive's approach to the cloud is that "we do not hold our customer's data hostage in the manner that certain freemium models employ." That can be read as a reference to some of the controversial elements of Yammer's business model, such as the absence of administration tools in the free edition of the product.

Sacks argued that the essence of freemium is allowing employees to try a software experience--particularly one that's supposed to make them more productive--before the contract is signed. "The days of being able to sell a product before employees have actually experienced it--those days are rapidly ending," Sacks said. "Whether you're time limiting it or functionality limiting it is less important than that you're letting them try it first and prove out the battle."

Although Yammer doesn't have quite the same "success coach" model that Jive is introducing, it already has "customer success managers" who serve a similar function, Sacks said. Because its freemium model brings in the mass market, not every new account gets the same personal attention. But Yammer employs algorithms "to figure out which networks are most interesting from an activity standpoint" and give those freemium users a nudge toward becoming premium customers.

As for whether customers are convinced within 30 days, Sacks said, "sometimes, yes, but sometimes it takes longer--that's why we don't use that model. But good luck to them. The exact method of upgrade to me is a detail. Good for them, let them try the model they think works best. This is the playing field on which I love competing."

In a more consumerized market, Sacks figures he can approach this competiton like Coke versus Pepsi, where Yammer gets to play the part of the Pepsi Challenge. "Comparison shopping will be easier now than it was before," Sacks said.

Sacks added that Jive will probably not stick to the 30-day limit, given an opening with a large customer that wants a longer trial.

I wondered about this, too. Jive's Mertz told me they were pretty serious about sticking with the 30-day time period, although "we do have to assess everything on a case-by-case basis." It's also likely that organizations might sign up as paying customers on a departmental basis, even while continuing negotiations toward a bigger deal, he said.

There are also signs that 30 days is more than enough. According to Jive, several of the customers who signed up for free have already turned into paying customers without waiting for the trial period to end.

Follow David F. Carr on Twitter @davidfcarr. The BrainYard is @thebyard and facebook.com/thebyard

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