The world of business has just drastically changed and one of the most established enterprise companies in the world just gained one of the most liberal and rebellious to have ever emerged onto the social scene in the past decade. Ever since Yammer, a well-funded social collaboration company, first came on the scene after taking the top prize at TechCrunch 50 in 2008, there has been a shift in the business paradigm. And now, on the heels of their recent announcement of Yammer’s acquisition by global software giant, Microsoft, this popular startup is poised to achieve even greater success and help disrupt the way people are doing business.
Perhaps commonly known in its beginnings as the “Twitter for Enterprise”, Yammer has come a long way in its short four year history to become the de facto service for millions of customers, many of whom are represented in companies that make up the Fortune 500 group. Under the terms of the acquisition, Microsoft will purchase the social business company for $1.2 billion in cash and will join the Microsoft Office Division, which is led by the division president, Kurt DelBene. When asked why they purchased Yammer, Microsoft CEO, Steve Ballmer, responded with “The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love.” It seems that the software giant saw some great potential that Yammer had versus what they could have possibly mustered using their own social enterprise software called Sharepoint. We’ll explore that a little bit later on, but suffice it to say, according to the announcement, Yammer won’t be integrated into the collective of software right away:
Yammer will continue to develop its standalone service and maintain its commitment to simplicity, innovation and cross-platform experiences. Moving forward, Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.
This is probably much welcome news for those existing Yammer users who probably liked the progressive and agile development of Yammer versus the packaged and more conservative and corporate build that came out of Microsoft with SharePoint. But Yammer’s acquisition isn’t just a boom for the startup, or even its famous and highly successful founder, David Sacks. No, it’s actually more a point of validation for the entire industry, as the Altimeter Group’s Charlene Li points out in her recent report on the enterprise social network industry. As Mrs. Li points out, while most adult individuals are probably adept at being on a social network in their daily life, there’s a disconnect and maybe even trepidation at companies and corporations bringing such forms of technology internally and harnessing it. And even though there are numerous services that have helped to spur the social business revolution, the fact here is that the Yammer acquisition has spurred a revolution, of sorts, and has helped usher social business into the mainstream–some might even suggest that the acquisition has added some validity to the market.
And it’s all led by Yammer’s founder and CEO, David Sacks. Mr. Sacks is probably equally well-known for his involvement in PayPal as their Chief Operating Officer who cashed out successfully from the company, joining the legendary “PayPal Mafia” and going on to lead an incredible career of working and starting successful startups, most recently being Yammer. His second successful exit puts him in the echelon of great entrepreneurs who many already look up to as a role model for how to develop, nurture, and grow a business from their humble beginnings into a company that exits to thunderous applause.
So now Yammer’s fate is in the hands of Microsoft. But the deal isn’t totally sound–some in the social business space believe that while it’s great that Yammer has been acquired, in the end, Microsoft will simply let Yammer whither and die, and it’s not as if it hasn’t happened before–just take a look at the recent news that the software giant is taking an enormous $6.2 billion loss write-off from their failed integration of ad-giant aQuantive. In a post published soon after the Microsoft-Yammer acquisition, Aaron Endre of Huddle wrote:
Microsoft probably sees Yammer as an opportunity to ride the ‘social’ wave without much effort. When Microsoft acquired Skype it wasn’t because the company didn’t already have homegrown VoIP software (they have Lync, previously known as Office Communications Server). They purchased Skype because they didn’t have a recognizable brand or the users behind it. Microsoft already has some of Yammer’s functionality built into its 11-year old clunky (and expensive) SharePoint product. And let’s not forget doomed Microsoft OfficeTalk, which was Microsoft’s answer to Yammer a few years ago before it faded into obscurity without much talk.
But while some may believe that Microsoft will be the undoing of Yammer’s long and famous culture of customer service and understanding of social, I think that it’s actually going to be the reverse. For many years, Microsoft has been known as the manufacturer of corporate tools and services. Many large companies are probably looking at the company as the means to help their company and increase productivity. It’s all about packaged software and long delays on updates and improvements. Granted, their technology has given us important applications like Microsoft Office and even a great operating system, but they have been lacking in adoption of the social enterprise–specifically integrating social and making business networks more useful and efficient. Not to mention, Microsoft’s culture has become more conservative and more like a fixed process. But when you intertwine Yammer’s eccentric personality into the mix, then it looks like Microsoft’s culture will soon wear itself out trying to resist this change. The enthusiasm and exuberance that comes from Yammer’s company culture is almost akin to that one sees from another big company who was recently acquired: Zappos–in Yammer’s case, Microsoft probably is seeing that the startup’s desire to disrupt the typical business paradigm is something that they’ll need in order to combat against other companies like Salesforce’s Chatter and even help show their SharePoint customers that they’re serious about helping business productivity.
And while there’s a lot of zeal and passion that Yammer can bring to the Microsoft front, it’s more advantageous for Microsoft to have Yammer because their social offerings are quite weak–in recent history, it’s probably really difficult for anyone to recall the software giant announcing anything revolutionary or major to the scale that Yammer has to offer–giving private networks to companies while being a great sounding voice not only for the internal team, but your faithful community. Yammer’s involvement with Microsoft will allow it the opportunity to continue to build a strong business application that integrates Skype, Office 365, SharePoint, and Microsoft Dynamics. Specifically, having the ability to tie in Skype and do video chats right in Yammer, along with real-time instant messaging would be enormously helpful and it would give Yammer the chance to have it as an offering. And while you’re able to collaborate and do document-sharing in Yammer, it can’t be that bad to tie in Office 365 into the mix, right? Using one of the most popular and highly used desktop publishing software available on the market, but now in the Cloud, would be immensely helpful for businesses, especially as their IT departments are so used to using Word, Excel, PowerPoint, and the like and just don’t want to have to interface with any new software.
Yammer’s agile methodology will change the way that businesses are used to receiving their software–they’ll no longer need to wait years before a new release has been finalized, but probably months, or maybe even weeks. What the user wants, they’ll get, and this new perspective will need to be something that Microsoft will need to adapt. Quite frankly, I’m going to be watching with interest to see how Microsoft’s culture will slowly change and whether that will cause them to change their tune to how they address the business world. After all, Microsoft SharePoint is used by 80% of all Fortune 500 companies, while 85% are with Yammer–those statistics show that Microsoft now has an incredible command over the marketplace. This move is a great one and now we just sit back and wait to see how this marriage plays out.
Maybe Microsoft’s tagline in their infographic is true…with the Microsoft acquisition of Yammer, “together we will deliver the most complete solution in the marketplace.” It’s a bit of a stretch, but perhaps it’s going to finally be “together we will deliver the most complete solution to help your business be better.”
Photo Credit: Yammer founder, David Sacks, via CommonRed.com