The Microsoft Yammer acquisition, Sharepoint, and social business

Posted by on June 18, 2012 at 8:56 pm.

It’s a closed deal. The media has widely reported the imminent acquisition of Yammer, the enterprise social network provider, by Microsoft for a whistle-evoking 1.2 Billion dollars. Everyone knows something big is happening here, and experts, in characteristic style, have quickly congregated around opposite ends of the pole – equally shrill in lauding or denouncing the move.

It is unclear as yet how Yammer will fit in Microsoft’s product portfolio – will it be used to bolster Sharepoint’s outdated and weak social capabilities? Or will it go the Skype way, where Microsoft uses it to enter enterprises through the backdoor (employees using it in small groups with or without official approval), and then upsell heavier Microsoft enterprise products like Sharepoint, Dynamics CRM and Office through integration points?

Social business is the winner

But underlying both of the above two approaches, or any other approach Microsoft might take, is an implicit acknowledgment – Social tools in businesses are here to stay. And this time, unlike Office 365 in cloud collaboration, Microsoft does not want to be a laggard in the race.

As a general rule, it suits giant companies to slow market movements and keep the status quo, and milk existing markets where they have a dominant position. Microsoft did that with cloud computing, till it was finally forced to move to the cloud with Office 365. But when an IT giant invests in and shows commitment to a new market movement, it is an indicator of the undeniable importance of the movement. Microsoft’s $1.2 billion spend on Yammer is one such indicator for the social business space. IBM’s attempt to be associated with the organizational study of social business is another. This is further supported by a flurry of merger and acquisition activity in the social business space.

But the most important indicator is real businesses using social businesses tools more and more, and reporting benefits. Email might not quite be dead yet, but it is increasingly finding a new companion in social business software.

But an important, and yet unresolved question is the best approach for a company to introduce social software. At HyperOffice, as we have argued before, we feel that collaboration software is a natural environment for social tools to be introduced. Social and collaboration tools both have something to contribute to each other (collaboration tools become less siloed, and social tools become task oriented rather than encouraging empty chatter), and moreover, both relate to generic communication and collaboration needs that exist in all organizations.

Microsoft probably plans to do the same by integrating Yammer into Sharepoint, its collaboration software. This is hinted by the emphasis Jared Spataro, Director of SharePoint Product Management, has put on social capabilities in Sharepoint’s future.

However, we feel that Microsoft is not likely to do justice to bringing the collaboration and social pieces together, given the vastly different architectures of Sharepoint and Yammer (the former is server based, while the latter is cloud native). Add to this the inertia of a risk-averse large enterprise with existing revenue bases to defend.

With most players in the market geared either as “collaboration” suites (Office 365, Google Apps), or “enterprise social networks” (Yammer, Chatter), we feel there is a gap in the market of a solution which combines the two approaches. We hope to fill this gap with HyperSocial….

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