My guess is you have heard the news by now, but if not it is worth pausing to note that SuiteTwo — the Intel backed Enterprise 2.0 offering that launched in 2006 — has officially closed up shop. All things considered this is not much of a surprise. While the joint venture between NewsGator, SimpleFeed, SixApart, Socialtext, and managed by SpikeSource was a big showstopper when it launched, the offering never realized its potential and died a mostly silent death. To be honest I can’t remember the last time I spoke with a company that was even considering the product.

The main problem was not the concept – the market has aggressively moved towards suites of blogs, wikis, RSS, and social networking – but instead the execution. Though Socialtext founder Ross Mayfield always disputed the label, SuiteTwo never became more than a ‘Frankensuite,’ a group of individual applications duct-tapped together. While I’m looking out for recession casualties, SuiteTwo clearly had bigger issues.

For the few SuiteTwo customers out there now looking for another solution my advice is to examine your firm’s use of the technology and reach out to the appropriate component vendors. Unless your firm has been inordinately successful at integrating the entire suite into your processes, you are likely making most use of just one or two features, while the others are mere accessories. Reach out to the vendor of that one killer feature first; all the vendors involved are still around and most have matured their product sets to a level comparable with SuiteTwo anyway. In all likelihood you should be able to replace your existing implementation pretty seamlessly with what is now better software.

As for NewsGator, SimpleFeed, SixApart, and Socialtext: I would be shocked if they weren’t already picking over the carcass. There may not be many customers to grab, but those that are out there should be highly profitable – they know the tools are valuable, don’t need training, and will have a very short sales cycle. Happy hunting!

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Update: Traction President, Greg Lloyd weighed in via email. See below for his comments.

Traction Software, one of the blog and wiki vendors selling exclusively into the Enterprise 2.0 space, announced last week that “2008 marks the sixth year of consecutive revenue and customer growth at Traction Software.” This is the same drill as for MindTouch; with the wind at its back in (most of) 2008 Traction better be setting new revenue records. Congratulations to the Traction team; Jordan hasn’t been in my ear every other week as of late so it looks like things are busy over there.

The other news Traction announced is that “To thank existing customers for their support, and welcome new customers, we’re offering a 20% discount on commercial or non-profit price of all software licenses or upgrade purchases made between November 17th and the end of 2008. The promotion applies to perpetual licenses as well as the annual subscription options announced in June.”

My first thought after reading that announcement: “Uh-oh.” I applaud Traction for taking decisive action and slashing its already affordable pricing and grabbing customers now, but clearly there are larger forces at work here than a simple thank you to existing customers. My guess is they have 20% slack built into the pricing anyway, but to cut it right off the top is aggressive. Either the company is struggling to meet growth targets — despite the positive returns in 2008; the economy is taking a toll faster than I thought it might; or the competition in the market is really starting to hurt. I would guess it’s a bit of all three, though I’m not terribly bullish on Traction’s long term prospects; it feels like the market has started to leave the company behind.

I’ll be on the lookout for more discounts — advertised or otherwise. If we see more than a handful of vendors slashing prices I may need to revise my market projection downward with prices falling faster than I originally modeled.

Jordan, I’m looking forward to an earful, though I’m traveling the rest of the week, so you may not hear from me right away!

Update: Greg Lloyd, Traction software President sent me a quick note on the post and has agreed to let me share his comments.

“Hi Oliver — I enjoyed finding your Strategic Heading blog – via Google  alerts – and encouraged Jordan to speak for himself on  your ‘Traction Offers A “20% Year End Discount”‘ From me: it’s not a price cut, it’s a 45 day promotion. As Freud said,  sometimes a cigar is just a cigar.

“We have a limited downside closing deals one or two quarters earlier than we otherwise might, and a good opportunity make our case as the smart alternative for penny-pinching visionaries who have a business purpose firmly in mind.”

As I wrote originally, wrapping up customers today, before budgets flip to 2009, makes a ton of sense and Traction is smart in doing so. That said I’m not quite ready to believe that a cigar is just a cigar in this case; in all something just leaves me uncomfortable. But as usual I am more than happy to be proven wrong.

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