Reported Yammer Acquisition Seen as Beneficial for Microsoft

If Microsoft buys Yammer, as unconfirmed press reports indicate, Susan Gautsch hopes the Yammer team won't lose the qualities she has appreciated in the several years her employer has been a customer.

The Yammer team has been attentive to customers and quick to improve and extend its product, said Gautsch, e-learning director at Pepperdine University's Graziadio School of Business, which has been using the enterprise social networking tool since 2009.

"I've always appreciated their rapid [product] development and they've always been very responsive to their customer base," said Gautsch, who's a member of Yammer's customer advisory board.

Citing anonymous sources, Bloomberg reported Thursday that Microsoft is in advanced talks to acquire Yammer for about US$1 billion. Microsoft and Yammer declined to comment.

The news has generated reactions on social media channels from Yammer customers, industry observers, partners and competitors, with the debate focused on what the future would hold for Yammer's staff and product with Microsoft as parent company.

What's clear is that the acquisition would help Microsoft beef up the enterprise social features in collaboration products like SharePoint, Exchange, Lync and Office.

Products like Yammer allow organizations to offer employees Twitter-like and Facebook-like functionality in a workplace setting. They let employees set up profiles, do microblogging, participate in discussion forums and receive activity stream notifications about what their colleagues are doing.

The promise of such products is that they can improve the way employees communicate and collaborate by complementing e-mail, IM and other more traditional tools. The products can be integrated with other business applications and managed by the IT department.

Microsoft and other vendors selling collaboration stacks, like IBM and Cisco Systems, have been incorporating enterprise social networking (ESN) functionality into their products. Enterprise application vendors are doing likewise, including Salesforce.com, SAP and Oracle.

But Microsoft is behind competitors in building native ESN features into its products, said Gartner analyst Larry Cannell.

"Microsoft has the weakest social play in the market," he said. "With Yammer they would immediately become a very strong competitor in the social workplace."

Yammer's software is cloud-based, so it would make the most sense for it to become a component of Office 365, Microsoft's Web-based collaboration and e-mail suite, said Forrester Research analyst Rob Koplowitz.

"I'd assume Yammer would remain a standalone service that could be consumable by Office 365 components," he said. Office 365 includes online versions of Exchange, Lync, SharePoint and Office.

Yammer has 5 million corporate users and its clients include over 85 percent of the Fortune 500. It has raised US$142 million in funding since its founding in 2008 and has about 300 employees.

Yammer offers a basic free version of its software, and three fee-based tiers.

Poshly, a 10-person Internet startup based in New York City, with staff in California, uses the free version for casual communication, polls, bookmarking and other tasks. Founder and CEO Doreen Bloch finds Yammer very useful for her company but has been disappointed that some features that were previously free no longer are.

"I hope that's not a sign of more restrictions to come on free accounts. For early-stage startups, I hope Yammer does continue to keep its many free features, which are beneficial until we decide to upgrade. If the acquisition means removal of the free option entirely, we may consider moving to other tools," she said via e-mail.

At the Graziadio School of Business, which pays for the software, Yammer is used by between 2,500 to 3,000 people, mostly students, but also faculty and alumni.

It uses Yammer for student communication, alumni community building and teaching, and it's especially effective for connecting users in different locations. The school has five campuses in Southern California and one in Northern California, as well as non-traditional students, such as working executives, who don't often attend classes in person.

The school uses a variety of collaboration tools, including Microsoft software, but Gautsch said "Yammer is the glue."

Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.

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