David: So how do you deal with new features? Obviously you listen to customer feedback, but you can only drive in a rear-view mirror so far. What about features they need but don't know about?
Adam: It’s a really interesting question because we do it a little differently. Most enterprise software companies can’t measure the impact of the changes they make, except the impact on sales.
David: Well you can look at cycle time?
Adam: Yes -- but at the end of the day, they don't know engagement, they know sales. And so, they get feedback from customers and understand what the market fit is and they build for that.
David: But you can never be a leader just building for what they tell you.
Adam: We do two things. One, we have a very broad long-term vision, which is definitely far beyond what our customers are thinking. We don’t know exactly how everything manifests on-screen, but we have ideas based on our internal thoughts and where we think things are going.
Simultaneously, we get feedback from our customers often in the form of feature requests. In every instance, because we’re going to be measured against the efficacy of the changes we make, we take a step back and say, what is the problem that this our customer is trying to solve, and what feature(s) might solve that?
David: Do you do this better than most other enterprise software companies?
Adam: I’d say we are better-positioned than most companies. We use our data to have open conversations with our customers and address their concerns. I think customers appreciate it because we acknowledge and understand their issues, and they know that we genuinely want to help them figure it out. By opening the dialog, we can work together to find answers and solutions.
David: So, now that you are part of Microsoft you're now part of the company that causes some of these problems. You know, the rigid IT and all that stuff. I mean Microsoft is one of the companies that has been involved with IT for a long time.
Adam: Technology was brought into the workplace by IT in the last decade. IT was the gateway, and Microsoft clearly did a phenomenal job building for their target audience.
David: Well at least marketing to that audience.
Adam: They built what IT said they wanted. The cloud enables a new way of interacting with customers and building software for those customers, and Microsoft is embracing that as well.
Earlier in the year, when we talked with Microsoft about the acquisition, one of the more surprising things was not only how advanced their thinking was on these things, but also how aligned our thinking was. In many ways, the success at Yammer was somewhat predicated in our assumption that they didn’t get it, and it turned out that they did get it and that was our enlightenment.
Microsoft is aggressively moving to the cloud -- they’re going to push their customers to the Cloud, they’re going to push their software to the Cloud, they’re going to start pushing their release cycles, they’re going to start iterating and innovating more rapidly. Yammer obviously is at the forefront of this. We release weekly or even daily.
One of the reasons we’re so excited is they are driving in the direction we’re going in and they are the experts on scale. They have scale, we have speed -- and we’re hoping to bring those two together to improve each other.
David: Well ok, it sounds great, but where will Yammer come into whatever Microsoft software and will it be part of Office, will be part of SharePoint, will be part of Office 365?
Adam: We’re part of the Office division and we’re both continuing to build great tools for the enterprise. We’re in the early stages of figuring out the specific integrations but what we do know is that Microsoft is committed to maintaining Yammer’s freemium business model, pace of innovation, and viral distribution model. Plus, we get to keep our headquarters in San Francisco.
We want to leverage a lot of Microsoft’s assets, including Office, Lync, and Skype. Over time, we are going to figure out how to integrate Office in Yammer more. What that looks like in the future, we’re have to wait and see.
David: But the models are so far apart?
Adam: It’s true they’re not the same, but we have been impressed with Microsoft’s pace of innovation and look forward to growing with them.
David: So what you are saying is that you are asking Microsoft to accept your software philosophy?
Adam: We’re trying to drive behavioral change, but they were already starting to think along these lines. We can share our experience.
We originally launched Yammer in September of 2008, so we had about 4 years in the marketplace. Microsoft has decades of experience in this industry.
David: What are you learning from them?