You are here: Home / Tech / Microsoft and Yammer: What’s the deal?

Microsoft and Yammer: What’s the deal?

by 5 Comments

Now that Microsoft’s much-anticipated $1.2 billion acquisition of Yammer is finally official, there are several interesting elements involving the Microsoft-Yammer union to consider, including:

Microsoft is late to the party, but very quickly strengthened its position: The company that brought us SharePoint is deploying its considerable resources to get a better position in what many have seen as a burgeoning marketplace.  It’s clear that Microsoft now thinks social business and collaboration is worth its attention and is deploying significant cash, as well as many of its smartest people to ensure that it is better positioned going forward.  I like their chances, but as Steve Ballmer said in Monday’s conference call announcing the deal, the real imperative lies in deeper product integration and learnings on both sides.

It’s about more than Facebook-like feeds: For those new to the enterprise collaboration and social business marketplace, there’s a misperception that Facebook-like activity feeds equals social business and collaboration.  Yammer brings a solid and proven platform for feeds to Microsoft — and I believe Microsoft will do a good job of integrating the technology and capabilities of Yammer into SharePoint and its other relevant technology assets.  It will be critical for Microsoft to always ask itself, “What’s next?”

Yammer's Windows Phone app

To reach Ballmer’s implied goal of empowering the consumerization of IT by individual users within an enterprise, a strong combination of effective integration and new innovation will be needed by everyone involved with this transaction.  Consumerization of IT, gamification and other such phrases are catchy buzz words best left to startups from the Valley — the enterprise customer wants to know how this could help them and their fellow employees become more productive.

This has to be treated as one step: I’’ve seen several accounts in which the Yammer deal is being characterized as Microsoft taking care of its enterprise collaboration/social business needs with one fell swoop via its $1.2 billion purchase. Not so. Microsoft has provided an invaluable engine room for development and innovation via SharePoint and the familiarity of the Microsoft stack (Office, Azure, and SharePoint) for enterprises, but plenty of challenges remain: One, the user experience for SharePoint 2010 still has significant room for improvement and two, there is still no effective document collaboration tool for enterprises using SharePoint.

Yammer definitely gives Microsoft a leg up in providing enterprise clients with access to proven, real-time social and activity feeds for employees, an important early step to be sure.  Scoring this deal as a baseball game, there are 1.2 billion reasons to get everyone’s attention: This was a good solid double in a game that has been going on for the past couple of years. Welcome to the new world of work — the enterprise has been waiting!

Overall, I think Yammer is a very strong play for Microsoft, but it has to be seen and treated as a first step, and not a walk-off home run.

Kevin Conroy is founder and president of Blue Rooster, a Seattle-based interactive technology consulting firm specializing in collaborative internal- and external-facing social business Web sites for large corporations. The company works with a growing list of Fortune 500 clients such as FedEx, Abbott Labs, Chevron, Eli Lilly and Microsoft to formulate social business development strategies, adoption of Microsoft technologies and implementations for its clients and their respective employees.

  • guest

    Unanswered: With MS’s considerable enterprise presence, including Sharepoint and Office, how come they weren’t able to create something equivalent to or better than Yammer and for a lot less than $1.2 billion?

    • Guest

      Decision-makers at small and medium enterprises (SMEs) often believe that Microsoft solutions are too expensive or too low-tech for them. Consider how many SMEs use Google Docs when Office365 offers far superior functionality with native clients for both Windows and Macintosh, for example.

      Investing in Yammer means two prongs of an attack: (a) Gain technology and engineers for noteworthy products and (b) Gain a customer base that had written Microsoft out of their own plans.

      Microsoft has excelled at the large enterprise, but Yammer signals a refocusing of attention towards the SME, and it is in the SME that we see a large growth opportunity.

      • kevin conroy

        Not sure i see that when all the comments out of MS noted the enterprise space and not the SME space -but like all of us – we are just arm chairing the move – it was a big one i will give you that!

    • kevin conroy

      good question – they had office talk internally that was a pretty good product and about 75% of what they needed with MySites – not sure but it was probably for the client acceptance. although tought to monitize free – unless there are a lot of services coming online to support the “activity feed” model.

  • http://twitter.com/fijiaaron Aaron Evans

    Really, they could have practically bought Salesforce for this sum — for a clone of it’s gimmicky “chatter” interface from 2 years ago.

    This is likely an inflated response to Oracle’s purchase of RightNow — to which Benioff heartily sang the eulogy and scooped up abandoned customers. Look for another windfall for Salesforce while legacy enterprise software companies try to buy into it’s market — only to send customers fleeing to the over-hyped leader as it’s competitors cash out.

    Expect a lot of SMB startups looking to get acquired followed by another 10+ year dearth as customers learn not to trust their data & core business to startups again. That’s the real Oracle long play — kill off business startups and open source to put a little FUD in SMB customers.