Why Microsoft Really Bought Yammer

By Paul Rubens, CIO |  Unified Communications, Microsoft, Social Networking

The deal has received a positive reaction from many Microsoft watchers. "I think that acquiring Yammer is a good idea for Microsoft from a social networking perspective because it gives the company a sexier, flashier, more consumer way of doing collaboration and it fills the gaps in Microsoft's social networking offering" says Jeffrey Mann, an analyst at Gartner. "But more importantly, it introduces the freemium way of doing things into the enterprise. They are buying a culture, a way of getting things done quickly, a web way of doing things," he said.

Yammer has developed considerable skills in terms of telemetry and click tracking, which enables the company to see how customers use its service, and fine tune it.

One reason why this is needed is that Microsoft has discovered that starting a social networking system from scratch is a difficult task indeed, especially as it is rooted in the on-premise way of doing things. And while its SharePoint platform is capable of carrying out many social networking functions, it can be difficult for customers to benefit from them.

"There are a lot of mid-sized customers who take a look at SharePoint and who are excited by the social features, but getting to use them takes a lot of work," said Miller. "It's not a matter of point and click to use them, you have to code, plan and deploy. With SharePoint you have to create social networking, while with Yammer it grows organically." Many SharePoint customers were looking to Yammer to add social networking features to the product, so bringing it into the Microsoft fold instead of competing with it made sense, he adds.

Miller says he believes that the acquisition will primarily be used to bring social networking to SharePoint and Microsoft's Dynamics CRM, but other analysts see Yammer being linked to the whole gamut of Microsoft business products.

"They will integrate Yammer with absolutely all their cloud offerings, and they will also social-enable their on-premise software with web-based components," says Rob Koplowitz, a Forrester analyst. "What you have to remember is that Yammer is bringing on customers at a very fast rate, and every one of those customers is a potential Microsoft customer."

He also suggests another intriguing possibility: Bearing in mind that Microsoft can now draw on Yammer's expertise with the freemium cloud software model, it is possible that Microsoft may turn its entire Office365 service into a freemium offering which includes Yammer.

Originally published on CIO |  Click here to read the original story.
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