Microsoft's announcement Monday that it will acquire Yammer, a social network for corporate use, sparked concerns about whether it paid too much, too late.
The $1.2 billion buyout comes as Salesforce.com, Oracle, Google and SAP continue expanding business-use social networks integrated into their respective product lines.
Microsoft has been trying futilely for years to popularize social networking within SharePoint, its collaboration server that comes bundled with versions of its Office productivity suite sold to large businesses.
By acquiring Yammer, the software giant is attempting to "fill a gap," says Wesley Miller, analyst at research firm Directions on Microsoft. Similar to Facebook, Yammer connects users and claims more than 200,000 corporate customers, including Ford, Orbitz Worldwide and 7-Eleven.
Miller says.
"The valuation seems high. This is Microsoft recognizing a valuable player in the field. The reality is, Yammer has a name, brings a fair amount of users, and offers an experience which SharePoint doesn't."
How The Microsoft of Yammer Acquisiton Fits
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Founded in 2008 by former PayPal executive David Sacks, Yammer made hay by offering a free micro-blogging service that caught on. It can enable the creation of private social networks where employees collaborate on projects.
Yammer will be added as a new Microsoft division and Sacks will stay on as chief executive officer.
Microsoft CEO Steve Ballmer said in a statement.
"The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love. Yammer adds a best-in-class enterprise social networking service to Microsoft's growing portfolio of complementary cloud services."
Business Enterprise Collaboration Software Comparisons
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Trip Chowdhry, managing director at Global Equities Research, predicts Microsoft Yammer will have a difficult time catching Salesforce.com, which has been beefing up its Chatter social network for a couple of years, and Oracle, which is pushing its Social Relationship Management services.
Chowdhry says.
"Microsoft is too late to the social party. You cannot get into a leadership position by imitating the leaders. This is a non-event for Microsoft and for the industry."
Even so, Tony Zingale, CEO of business social network supplier Jive, which went public last year, says the buyout validates the notion that social networking is destined to emerge as a must-have business tool.
Zingale says.
"Microsoft had to make a rather desperate move to buy a company — that has an extremely narrow offering that's given away for free — to be able to compete with the likes of someone like Jive."
Miller notes that back in 2008, Microsoft spent $1.2 billion to acquire FAST Search & Transfer and integrate the search engine into SharePoint. But that upgrade has failed to wow customers, he says.
It remains to be seen whether the Yammer deal will follow suit. Miller says.
"My concern with Yammer is that they may present a more confusing picture in the short term, by broadening Office and SharePoint. "
COMMENTARY: I never heard of YAMMER until just today. Unless you are a user of a large corporate enterprise system (i.e. Fortune 500/1000) chances are pretty good that you never heard of YAMMER either. Needless to say, it's official: Microsoft is acquiring Yammer
Here's the press release on the YAMMER website:
"Yammer is pleased to announce that we have signed a definitive agreement to be acquired by Microsoft. Microsoft will continue to invest in Yammer's stand-alone service, and the team will remain under the direction of David Sacks within the Microsoft Office Division. As a Yammer customer, you will continue to get a secure, private social network—delivered with the same focus on simplicity, innovation, and cross-platform experiences. Over time, you’ll see more and more connections to SharePoint, Office365, Dynamics and Skype. With Microsoft’s backing, our aim is to massively accelerate our vision to change the way work gets done through software that is built for the enterprise and loved by users. Read the press release and our blog post to learn more.
Social media has dramatically changed the way we share and connect with friends and family, and it will have an even more profound impact on the way companies operate. Giving your organization the advantage of a social foundation is critical for success in today’s fast-paced environment.
Yammer is a secure, private social network for your company. Yammer empowers employees to be more productive and successful by enabling them to collaborate easily, make smarter decisions faster, and self-organize into teams to take on any business challenge. It is a new way of working that naturally drives business alignment and agility, reduces cycle times, engages employees and improves relationships with customers and partners."
About Yammer
Yammer is a secure, private social network for your company. Yammer empowers employees to be more productive and successful by enabling them to collaborate easily, make smarter decisions faster, and self-organize into teams to take on any business challenge. It is a new way of working that naturally drives business alignment and agility, reduces cycle times, engages employees and improves relationships with customers and partners.
Background
- Pioneered Enterprise Social Networking when we launched in 2008
- Among the fastest growing enterprise software companies in history, exceeding over four million users in just three years
- Raised $142 million in venture funding from top tier firms
- Used by more than 200,000+ companies worldwide
Social Expertise
- Built social from the ground up with ‘Facebook DNA’: Facebook’s Founding President, Sean Parker serves on Yammer’s Board of Directors
- Yammer and Facebook share the same first investor, Peter Thiel; backed by Social+Capital Partnership – a fund established by former Facebook Vice President, Chamath Palihapitiya
Their Customers
- More than 80 percent of the Fortune 500® are using Yammer
- Leading organizations including Deloitte, Ford, Nationwide, 7-Eleven, Orbitz Worldwide, Rakuten, and Telefonica O2 have adopted Yammer
Recognition
- A leader in “The Forrester Wave™: Mobile Collaboration, Q3 2011″
- Recognized with Deloitte Australia in the 2011 Forrester Groundswell Awards as the winner in the Management: Collaboration System category
- Named an “Innovative Application Software Company Under $100 Million to Watch, 2011″ by IDC
Accessing Yammer
Users can access Yammer anywhere since it is a Software as a Service running "in the cloud." You can access Yammer on your desktop computer, laptop or handheld mobile device. Yammer apps are available for your iPhone, iPad,Android, Blackberry & Windows devices. You can also embed Yammer into other applications to receive your Yammer newsfeeds automatically. Yammer can seamlessly integrate with Microsoft Sharepoint, Salesforce and SAP.
Microsoft Strategy Behind Yammer Acquisition
Microsoft CEO Steve Ballmer is counting on Yammer’s sharing tools to ensure that long-established Microsoft applications, including its word processing and spreadsheet programs, remain vital components for getting work done. Google Inc. has emerged as a threat with a toolbox of similar programs that run primarily over the Internet rather than on individual machines.
Ballmer said on a Monday conference call.
“Think of Yammer as a fundamental part of our Office family.”
Microsoft will have much of the same autonomy given to Skype since that deal closed eight months ago. Yammer will continue to be run from its San Francisco headquarters by its co-founder and CEO, David Sacks. It will also continue to provide its services separately from Microsoft’s offerings.
Gartner Inc. analyst Larry Cannell said Microsoft’s latest acquisition was smart and reflected “a recognition that the social capabilities in Microsoft’s products have been deficient.”
Although other companies such as Jive Software Inc. and Salesforce.com Inc. are building social networks for businesses, Yammer shares the most DNA with Facebook Inc.
When it started in 2008, Yammer raised its initial funding from Peter Thiel — Facebook’s first major investor. Thiel formerly worked with Sacks while they were both executives at PayPal, an online payment service that eBay Inc. bought for $1.5 billion in 2002.
Salesforce's Chatter users have created over 250,000 social networks, so their product is obviouly filling a need in both SMB's and enterprise users. Yammer claims that 80% of the Fortune 500 are using its enterprise social network SaaS. Because Yammer already integrates with Salesforce, Microsoft's Share and SAP, it can tap into those large user customer bases. The payoff for Microsoft will come in huge amount of data that it will be able to gather about its users. This will allow it to better serve its SMB and enterprise-wide customers and provide them with the products of the future.
If you would like to learn more about Yammer, check out their product videos on YouTube by clicking HERE.
Courtesy of an article dated June 25, 2012 appearing in USAToday and an article dated June 25, 2012 appearing in The Washington Post
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Posted by: Crm Consulting | 12/06/2012 at 03:56 AM