I interviewed Yammer co-founder Adam Pisoni about a month after Yammer's acquisition by Microsoft, and he had a few things to say about collaborative tool winners and losers, and why he thinks 70 percent of IT collaboration projects fail.
David: So we have an old saying that says "he who has the most connections wins."
Adam: I think that's true. Connections aren't just about people anymore. The people are the most important part, but you are also connecting to systems.
David: Yeah. I mean a tool that adds more features is less useful than a tool that allows you to connect to more different data types.
Adam: You're speaking my language.
David: So with 2000+ collaboration tools, why do you think most of them fail?
Adam: I think the question is, why is social is successful in some companies and not others. Furthermore, why are so many social tools unsuccessful?
David: Well let's say collaborative tools ...
Adam: Yes. And I have a strong opinion on that also. The new breed of collaboration tools are fundamentally different from the kinds of tools we've been building for the enterprise for the past couple decades. Traditionally tools for the enterprise were built for the IT buyer and adoption was mandated. Think of your CRM or if it's your expense system ... you always have to use it if you want to get paid. Because of that, there was no real motivation on the part of vendors to innovate around the user experience.
David: They haven't had to.
Adam: Exactly. Meanwhile, on the consumer side, we've seen a lot of innovation.
David: Because there's more pressure?
Adam: There's definitely more pressure. In the consumer world, no one is forcing you to use a given application. If it’s not good, people will try another. The switching cost is low. So they've had to figure out "how do we build things that people want to use?"
David: Let's use Facebook for example; they are now just over a Billion people.
Adam: It’s really crazy. You could argue that social networking technologies in the consumer space have been the most successful software ever written. And yet, they have been almost the least successful in the enterprise. 70 percent of IT-dominated social initiatives will fail this year, according to Gartner.
David: And why did they say 70 percent will fail?
Adam: You know what the reasons are? I think I know why. It’s because they don’t think of them like Facebook thinks of social. Facebook thinks of social like people have to want to use it. They think of them in terms of how we used to think about software features and functions.
Adam: I think that the majority of collaboration tools have failed because they were built for the buyer to be mandated and not built to be used.
David: And the other thing is that IT often does what is easiest for them to do, rather than what's best for the organization. And that's why a lot of people are on the merry-go-round?
Adam: Well their priorities are different, and their priorities aren’t wrong, for example security is all that matters. But IT's priorities are different than the business user who just wants stuff to work the way they need it to work.
David: So are on-premise systems more secure than cloud-based systems?
Adam: Certainly there's this illusion now that on-premise systems are more secure than Cloud systems, which is not true. The most insecure systems -- are people.
So then, I think that most collaboration systems fail because they weren’t built to be chosen and I think that the reason that we’ve been successful where others have failed is because we….
David: You're saying that most collaboration system are more of the old-style collaboration systems?
Adam: I think that enterprise software companies have had a hard time getting the end-user to choose their systems because historically they weren't building them for that purpose.
The shift we're seeing (which is why Yammer is proving to be successful) is that the freemium models are aligning our software development priorities with our users. They have to -- if users don't find value in it, then we don't make money. Our team continues driving the freemium model because we see that it's just better.
David: They've been very successful.
Adam: It makes us build software differently than most companies. We are more like Facebook or Twitter but clearly with the sort of security and control considerations that enterprise software companies have. It’s very data-driven, it’s very iterative, it makes no assumptions, it’s very different from what most enterprises are used to.
David: Ok. Let's see. Your big idea when you started Yammer was to make it easy for people inside of companies to communicate with each other in real time. Over time, how has your goal changed?
Adam: That is still the primary goal, with the exception that as an extension of that goal we are trying to make Yammer more actionable. So this is the place you go to get work done (not just talk about getting work done) and connect to your other systems. So, Yammer itself is more networked with the tools that you use. It's not trying to replace those other tools. They can’t replace your CRM system.
Adam: But it should be more tightly integrated, so you can talk about and have actionable workflows around these other systems.
David: So you integrate it with SalesForce and SugarCRM and ...?
Adam: Yes, and we're going to continue to increase the number of partners. We have over 40 today but we are adding more quarter by quarter.
David: Do you see Box as a competitor?
Adam: Not really. Box is one of our partners. We want more companies to move into the Cloud. That benefits everyone. So if anything, we want more competitors
David: OK. And are you going after partners in any particular way? Like is there any class or group of partners you're going after? Are you going after project management tools?
Adam: We like to go after ones that are strategic. Early on, we went after the big ones, like SAP and obviously SharePoint, Dynamics, Salesforce. These were very strategic. Now, we're looking at just making sure we have a pretty broad portfolio of enterprise class applications. So you're right about project management, but also social CRM …
David: Maybe ERP?
Adam: ERP, CRM, the sort of like social media management tools. We are just going after a really broad range. It turns out there are lots of companies in the enterprise but they're far fewer than in the consumer space, so there is a finite number of partners you can have.
David: Ok. And you're not picking them so much on their technology but the fact that they have the same target market user?
Adam: The technology is important in that there are some that are easier to work with than others. Obviously, Cloud is easier to work with than on-premises.
David: The conclusion of this article talks about Yammer’s integration strategy, and the two things Adam thinks gets in the way of most collaboration. How business models are changing, and driving more value out of employees, how space effects collaboration, and how communication drives everything!
Editor's Note: Look for the final installments of David's interview in two weeks. In the mean time, you might like to read David's The Collaboration Circus