Mark Smith's Analyst Perspectives

This week Peoplefluent announced that it has invested in Socialtext, a company that provides social collaboration software at the enterprise level. With this strategic investment Bedford Funding, the private equity firm that owns Peoplefluent, is the direct beneficiary. Peoplefluent will extend Socialtext into the human capital management market while continuing to let the company meet the broader market interest in its offering. Peoplefluent has moved quickly to make this application and platform available to its customers.

This acquisition is spurred by the need of businesses to integrate social collaboration into human capital management. Our benchmark research on Social Collaboration and Human Capital Management, soon to be released, finds that 45 percent of organizations will fund social collaboration to support their talent management needs. The up-and-coming Socialtext is based in Palo Alto, Calif., which gives Peoplefluent a presence in Silicon Valley, where many social media and collaboration technologies have been born. Peoplefluent, which has been adding more people- and process-centric capabilities to its applications, can use Socialtext as another avenue to help individuals maximize their potential. Socialtext’s innovative collaboration environment has a dashboard but is really a collaborative portal framework in which other applications that comply with the Google OpenSocial standard can embed content and services.

Socialtext enables private and public group collaboration and project management. It also offers individual collaboration and communications with what it calls activity streams. The social networking approach lets individuals ask questions, post comments and provide feedback. The software also has capabilities to create content from blogs and wikis, and its Socialtext 360 matches people based on their interests to facilitate coaching and mentoring in the organization. Individuals can create teams whose members are physically located in different geographic areas. Socialtext also works with spreadsheet inventor Dan Bricklin, who co-developed VisiCalc in the 1980s and has been advancing SocialCalc, an open source, JavaScript-based spreadsheet that could integrate analytics within social collaboration technology for ease of access and review. In this approach, the numbers in spreadsheets become focal points for collaboration, and the software provides an environment in which to discuss actions and decisions based on the business analytics.

Not long ago, Peoplefluent acquired Strategia, a learning management system, to address the growing need for online learning within its application suite. This acquisition provides organizations the critical ability to develop and maintain a robust library of content and to track compliance with policies and regulations and also mature the competencies of its talent. Peoplefluent Learning can integrate with Socialtext for social learning. Strategia provides significant capabilities for creating and cataloguing learning content and tracking who has and has not viewed it. Together, Strategia and Socialtext will power a new generation of social learning within Peoplefluent’s portfolio of applications.

Peoplefluent uses tablets as a platform for a new class of manager applications that bring together tasks from team building to performance and compensation reviews, expanding what is possible with mobile computing. Peoplefluent’s native applications are in the Apple application store, and its frequent updates, such as recent support for the new iPad, are what customers expect in tablet software. Socialtext was advancing its capabilities to operate on tablets which will advance Peoplefluent efforts.

Our new research on social collaboration shows that organizations are making knowledge sharing, collaboration and learning top priorities for social collaboration, and Peoplefluent is capitalizing on this trend in software for human capital management. The research found that critical workforce metrics include employee satisfaction (69%), employee retention rates (62%) and leadership development (58%), as having employees engaged and interacting with others provides a sense of belonging and encourages contribution. With Socialtext, Peoplefluent has the human capital fabric to integrate its applications and processes for connecting people who have common responsibilities and interests. This sort of social collaboration to support employee engagement will become a standard way for organizations to operate, and Peoplefluent is positioned to be at the center of this opportunity. The company faces some challenges in rapidly integrating the acquired products, but I expect the process to go more quickly than you might think thanks to the open standard used at Socialtext, and the fact that Peoplefluent has been using Socialtext internally and is familiar with its capabilities.

Organizations that want to find ways to retain and engage their talent should look into how Socialtext operates as it becomes the focal point of Peoplefluent’s portfolio of applications for human capital management now combined with social collaboration.

Regards,

Mark Smith – CEO & Chief Research Officer