Yammer: One Year Later
"One year in — the biggest change is that we have to think at such a greater scale."
Yammer co-founder and GM of Engineering, Adam Pisoni
One year ago, the partner community received the official news about Microsoft’s $1.2 billion dollar acquisition of social collaboration vendor Yammer. The announcement was met with applause, but at the same time, some apprehension. As a rapidly growing leader within a quickly growing segment of the market, it was easy to see on the surface why Microsoft would be interested in picking up a market-leading solution, but there were also questions about how their social collaboration features would fit into an already broad set of capabilities across several different Microsoft products. But more importantly, there were questions about how Yammer’s corporate culture would fit within Microsoft’s culture. Would they clash, or would one of them blink?
While attending the E2 Conference in Boston this month, with Yammer participating in keynotes and leading some sessions, I was reminded of the fact that we were about to hit the one year mark for the acquisition, and I began thinking about the impacts of the Yammer team and technology have had within Microsoft and on the social collaboration industry. As the evangelist for a Gold Partner and SharePoint ISV, I had one perspective. My company began talking to Yammer prior to the acquisition, and has released a product that integrates with both SharePoint and Yammer, giving me another perspective. Add to that my role as a SharePoint MVP, prolific writer, and more than a decade of building and deploying enterprise social collaboration tools and platforms, and I have yet another perspective to share.
Making a Case for the Acquisition
A year ago, the SharePoint community was anxiously awaiting the impending release of SharePoint 2013, bringing with it the promise of a major social capability upgrade, delivering community tools and a set of features that were to integrate native social interaction into an already powerful set of structured Enterprise Content Management (ECM) collaboration features. However, the question among partners and vendors alike was whether SharePoint was delivering too little, too late. SharePoint 2010 had offered a very robust set of ECM features, but as more and more social collaboration vendors were coming online, it became clear to Microsoft that the space was moving much quicker than anticipated. While SharePoint 2013 was offering near-parity to competitive enterprise social collaboration solutions, analysts and customers alike were asking how Microsoft planned to keep up with the rapid pace of change within the consumer social collaboration space – against which most end users compared the enterprise features.
Education on the business value of social is still needed. Many companies still view social as an end user-driven feature set, with a loosely defined value proposition. The primary benefit that organizations adopting social intuitively understand is its ability to almost instantly improve employee engagement — getting people to engage in conversation, share ideas, and utilize the toolset — which is a major problem within most ECM platforms, including SharePoint. A collaboration platform that lacks end user participation, no matter how well-defined and implemented, is a failure. Many customers are looking to Yammer and other competitors as a way of filling the ECM adoption gap.
At Microsoft’s Worldwide Partner Conference (WPC) in Toronto last year, SharePoint’s Senior Director of Product Management, Jared Spataro, made the clearest case for the Yammer acquisition in three reasons:
First and foremost, Microsoft needed to stop a competitive threat. The Yammer team had come to the realization that to grow, they would need to expand their functionality by adding SharePoint-like features or through targeted acquisition. Microsoft recognized that Yammer, with the addition of key structured collaboration features, would directly impact their business.
Second, Microsoft wanted the benefits of the freemium model as a way to quickly A/B test new features, and get feedback from real end users, allowing the company to more quickly ship the features that people wanted. Microsoft had previous success with the freemium model through Hotmail, but with the acquisition of Skype, the company had begun to realize the power of the model to also rapidly expand their customer base.
Third, Microsoft recognized that they needed afresh perspective to their development approach and culture. While Microsoft continues to employ some of the sharpest minds in the software space, the average age of the Microsoft employee has gone up in the last decade, and the company was no longer being viewed as "the" destination of choice for college graduates — an essential ingredient in bringing fresh new ideas and perspectives to the company. The shift to a much more agile development method, with Yammer releasing updates as frequently as twice a week, was a way to help extend Yammer’s culture of innovation.
Considering these points, it was only logical that Microsoft acquire Yammer when they did.
The blogosphere has had much to say about the seemingly slow integration path between Yammer and SharePoint platforms. However, there were integrations available with SharePoint 2010 on day one. For paid customers, there is the option to push SharePoint content to your Yammer feed as an attachment. While it does not retain any link to the SharePoint content, such as metadata or workflow state, it does help bridge the two platforms. Administrators can also embed Yammer feeds within a simple data view web part in SharePoint, giving your project site some degree of visibility into the Yammer threaded conversations happening within your company.
Microsoft was clear up front that the initial integration issues were big, and would take some time: create an integrated newsfeed, simplify authentication, and streamline end user profiles. The company laid out a high-level timeline, and has delivered to that timeline, most recently releasing an update that allows Office365 (SharePoint Online) users to swap out their SharePoint newsfeed with the Yammer newsfeed. Also announced earlier this summer was an integration with the Dynamics CRM platform, offering a combined solution to compete with Salesforce Chatter.
The primary points of contention with members of the SharePoint community have been the speed at which Yammer integration has happened to date, and the need to offer a social experience similar to that of the SharePoint 2013 on premises social capabilities. The expectation is that the SharePoint newsfeed, whether on premises or online, should contain newsfeed updates on follows, likes, content sharing, and other traditional SharePoint activities – in a nutshell, the newsfeed should be an integrated part of the social experiences within the platform. While activities within Yammer appear on the user’s Yammer newsfeed, those SharePoint activities cannot yet appear in the Yammer newsfeed if Yammer is selected to replace the out-of-the-box SharePoint newsfeed. Adding to this on premises discrepancy is the lack of controls over what is shared or discussed, with many customers concerned about the lack of basic governance and administrative controls in Yammer.
At the recent E2 Conference, Yammer co-founder and GM of Engineering, Adam Pisoni, addressed some of these questions from the audience during a morning keynote, answering that the underlying goals of the two platforms were different, with Yammer offering a more people-centric solution that is very different from the structured collaboration value proposition of SharePoint. Pisoni made it very clear that there would "never be an on premises version of Yammer" but that SharePoint would continue to support some social features for those customers who are not able to move to the cloud just yet. He told one audience member, "There are a lot of people on premises who cannot move off of (their on premises platform) very quickly, but it’s just a matter of time. The future is here, but it’s un-evenly distributed." Pisoni is clearly bullish on how quickly organizations will move to embrace the cloud model, regardless of industry or sector. While I personally agree that the cloud is our future, I am also keenly aware of the financial investments many organizations have made in SharePoint on premises, and of other regulatory and security issues that may prohibit a move for the time being, and a move en masse will take longer than Microsoft’s marketing recognizes.
True Impact of the Acquisition
When I think of the true impact of the acquisition, my sense is that Microsoft has achieved exactly what they had hoped from the deal, as summarized by Spataro’s WPC12 comments above: they halted a competitive threat, they added market-leading social capabilities to their portfolio, and they brought a dynamic new model to the company. But the real value of the acquisition, perhaps, is just now being felt. Pisoni talked about this in some detail at E2, stating "When Microsoft bought us, (social is) what they thought they were getting. In hindsight, that was not the real value of what they were getting." He went on to talk about the benefits of the cloud model, and how Yammer’s unique agile development model was changing more than just the SharePoint space — but is also impacting the larger Office organization, and is spreading across Microsoft.
Office, of course, was already in the cloud and was fully moving forward as part of CEO Steve Ballmer and Office Division President Kurt Delbene’s "all in" cloud strategy, but the Yammer acquisition brought with it proven cloud development methodologies and experience. As soon as the two companies were one, multiple organizations reached out to meet with the Yammer analytics team, to understand the mechanics of their releases cadence and A/B testing model, and to better understand how a company culture built upon rapid ideation-to-innovation could be scaled within the Microsoft infrastructure. Pisoni shared some insight into why getting acquired by Microsoft made sense to them — Yammer had a solid growth rate, and a goal to help every company become connected (comparable to Microsoft’s one time goal of a PC in every home). But more importantly, they recognized alone they could not reach the scale that they could reach together with Microsoft, instantly giving them access to an ecosystem with a billion users.
Nobody inside of Microsoft claimed to know how things would turn out. Quite the contrary, they expected to learn from the acquisition, having paid attention to Yammer’s own learning. As Yammer had done since the inception of the company, Microsoft wanted to leverage and learn from using their own software, and shape their next steps based on what they learned. Pisoni shared that Microsoft is reconsidering their entire Go to Market model, rethinking how they scale the Yammer platform, rethinking how they can meet those customer needs as part of the Microsoft Office family. The goal of Yammer has been expanded to help the Office platform become more open and connected. Outside of Microsoft, Yammer was focused mostly on document storage because that was where they were able to directly add value. Now that they’re part of Microsoft, with access to a much broader range of technologies and expertise, the Yammer product management team can think more broadly — there are more tools at their disposal to affect how they solve problems for customers.
Looking toward the Future
With what Microsoft has learned about delivering to the cloud combined with the size and capabilities of Office, I think we’re going to see some dramatic things out of Yammer in the coming year. Considering the potential of enterprise graph alone, Yammer is positioned to extend community and conversation across all collaborative business and productivity applications — giving customers a community-centric view into all of the activities happening across the social enterprise. And when you think of the potential for collaboration across PCs, tablets, smart phones, and embedded devices, their opportunity grows exponentially.
Yammer executives often talk about how the rate of change to business is accelerating because the pace at which we communicate is accelerating. However, the vast majority of companies were not built for change — they are inefficient, and their processes and tools will not scale to meet this increasing rate of change. Pisoni wrapped up his E2 comments talking about the difference between organizations set up to manage efficiency (a remnant of the industrial age of business) versus those set up to enable innovation, stating "Efficiency is at odds with innovation, and needs to shift from a culture of predictable, efficient, and structured to one that is dynamic, flexible, and innovative."
Between Pisoni’s keynote comments, my interaction with the Yammer team within the exhibition hall, and from my interaction with members of the SharePoint product team, a key difference from one year ago has been a shift from talking about features to talking about the need for a cultural change. The Yammer team is making the discussion not about the technology, but about disruption to the status quo of how business is done – about truly becoming social enterprises. Whether they will be successful in reaching these broad goals is yet to be seen, but certainly with all of the confusion about how the cloud, and specifically social collaboration technology, will deliver on customer expectations, it is good to hear a vendor focusing on the business issues these social tools are impacting.