Microsoft bought out the enterprise social network company Yammer, for a reported US$ 1.2 billion last June, announcing plans to add Yammer to its SharePoint 2013 and Office 365 application. It has also been selling Yammer packages at such a low price point that only massive sales will recoup its investment.
Microsoft clearly thinks that they are on a big business software winner by acquiring Yammer.
Certainly David Sacks, CEO of Yammer, believes his company is a pivotal player in business communications. At his recent product conference, he said, “social features are going to pervade every application.”
While I certainly agree with Sacks's optimism for the industry, it's interesting to examine what Microsoft hopes to achieve by forging this union, the repercussions of baking Yammer into its products and whether this merger of software can deliver the results that Microsoft needs for a return on its investment.
A New Identity
Microsoft has been struggling to keep up with the changing zeitgeist of IT. With a few exceptions, its applications have never really hit their mark and become dominant. Companies are often slow to adopt their new operating systems because it is so difficult to upgrade. It urgently needs a new identity.
By fully embracing pioneering and trendy Yammer, Microsoft will gain the desperately needed new legs which could lead it into new territory. It would be seen as the market leader who can still innovate and deliver winners.
Yammer is attempting to be the key driver for this recent paradigm shift towards business social networking. Microsoft believes that this socializing of business tools will have immediate and widespread appeal for business. It believes business is now ready for this great change, and that Yammer will be the vehicle for this transformation.
How Practical is the Vision?
Microsoft seems to have adopted an "all-in” approach. However, it is Yammer who appears to be in charge of the vision.
Through the Enterprise Graph in the upcoming version of Yammer, Sacks sees every file or piece of data available to everyone in the company, across every business application and so “connect every employee and every business object.” He also sees enterprise social networks eventually evolving into actual platforms.
I'm wondering how practical this is? The problem I see is that Microsoft could risk alienating businesses because it may not have thought through the broader implications of its strategy.
For example, does the creation and dissemination of all information need to be social? Can businesses even afford every application to be social? Does this total integration improve productivity? How well will it work for enterprise businesses?