Jive Communications VP Talks Growth, M&A Strategy, and E-Rate

Jive Communications VP Talks Growth, M&A Strategy, and E-Rate

By Paula Bernier, Executive Editor, TMC  |  April 07, 2016

One of the early players in hosted voice, Jive Communications Inc. celebrates a decade in business this August. The company has experienced an average growth rate of 70 percent over the last four years, fueled in part by its aggressive acquisition strategy.

Bob Locklear, vice president of corporate development, leads the M&A effort at Jive Communications. He spoke with TMC (News - Alert) yesterday about the company’s acquisitions, its beginnings, channel strategy, differentiators, key vertical areas of focus and more.

Jive Communications, which is based in Salt Lake City, Utah, got its start doing software development for companies in its geographical area. One of its early customers wanted a phone system, so Jive Communications built one using Asterisk (News - Alert). Then that customer wanted Jive to host it, Locklear said, and after Jive arranged for that its leaders thought “wow this is a business.”

Today Jive Communications is purely a hosted voice provider, offering services out of its eight data centers, said Locklear. (It does not have an on-premises offer, and it does not do SIP trunking.) Its PBX (News - Alert) solutions are a combination of Asterisk and its own special sauce that allows for scalability, he added.

The company today has between 450 and 500 employees, is profitable, and has between $40 million and $80 million in revenues and is growing quickly, said Locklear. Owned primarily by its founders and employees, Jive Communications has gone outside for funding only once, having received some funding from Northbridge Partners during its A round, which closed in August of 2013.

Jive Communications feels the ease of use its systems deliver, its pricing, and its service and support are differentiators, as is its expertise in select verticals such as education.

The company’s Dial Plan Editor enables customers to map out their call flows visually using a drag-and-drop interface. Making moves, adds, and changes on the Jive Communications system is very intuitive, said Locklear. Jive Communications also provides customers with a service account manager, and its network engineering team ensures customers’ networks are correctly configured for voice, and if there are issues the team helps with troubleshooting.

In terms of pricing, Locklear said, Jive Communications doesn’t nickel and dime its customers, but instead offers service packages that start at $19.95 per user and include domestic long-distance, unlimited extensions, call center features, and more. The company also offers a mobility app, which is available for a one-time cost of $20.

About half of Jive’s customers are small and medium businesses, which are served by inside sales and the channel partner network it’s built in the last four or five years. However, Jive Communications does have a national accounts team that caters to chains and franchises, including auto part stores, multi-location retailers, tax preparation offices, and the like.

Education is a key area of focus for Jive Communications; in fact, this vertical represents about a quarter of Jive’s annual recurring revenue.

“We have 10 times the USAC E-Rate recurring revenue as either 8X8 or RingCentral (News - Alert),” said Locklear, referring to the Universal Service Administrative Company that runs the federal government’s E-Rate program, which assists schools in paying for communications solutions.

The company decided to target this arena about four years, with a concentration on K-12 and E-Rate sales.

“That’s one of those areas where you have to learn how to make that work,” said Locklear, who adds that as a result of its research and experience, Jive Communications can now help schools navigate E-Rate.

“Hosted VoIP is one of the programs that qualifies for E-Rate funds,” he added. “For a school it essentially offsets their costs for the system.”

The hosted VoIP marketplace is a heavily populated one. But Jive Communications has been among the companies consolidating this product category, having acquired Phoenix-based COMVOICE in April of 2014, purchased FoneAngle of Vancouver in May of 2015, and closed the deal to buy Easy Office Phone (News - Alert) (now Jive Canada) of Toronto late last year. The Easy Office Phone deal was Jive’s largest acquisition by far, and brought the company 200 partners, a sales team, a support team, interconnect agreements, and rate center access for all of Canada, said Locklear. (Jive Communications also bought Speek, a visual conferencing system, in June of 2015; Locklear said that was more of a technology acquisition. Jive Communications continues to look for acquisitions in the collaboration space.)

In addition to its focus and operations in Canada and the U.S., Jive Communications has some business in Mexico, it’s moving into Central and South America, and the company has an international team that is looking to build on that geographic expansion, Locklear said.

Edited by Maurice Nagle