Microsoft and Yammer. (Un)happily ever after?

UPDATE 6/25: Multiple reports confirm that Yammer has been acquired by Microsoft for $1.2 billion.

The internet is abuzz with the tantalizing notion that Microsoft’s latest move to augment their software with social features includes the acquisition of Yammer for a reported $1.2 billion (or $1.4B or $1.6B according to some reports – http://read.bi/LWjZdR).

Will the deal happen? Probably. Will it be a panacea for Microsoft software? Probably not.

Here’s what we know for certain: the enterprise collaboration space is hot, fueled by growing enterprise demand for efficient solutions that boost productivity.

Responding to this demand, larger established software companies have purchased nimble start-ups with lots of users to integrate social features (e.g. Salesforce.com bought Radian6 and Buddy Media, Oracle bought Collective Intelligence and Vitrue, VMware bought SocialCast, etc.)

Microsoft probably sees Yammer as an opportunity to ride the ‘social’ wave without much effort. When Microsoft acquired Skype it wasn’t because the company didn’t already have homegrown VoIP software (they have Lync, previously known as Office Communications Server). They purchased Skype because they didn’t have a recognizable brand or the users behind it. Microsoft already has some of Yammer’s functionality built into its 11-year old clunky (and expensive) SharePoint product. And let’s not forget doomed Microsoft OfficeTalk, which was Microsoft’s answer to Yammer a few years ago before it faded into obscurity without much talk.

It’s almost as though execs at these software companies are sitting in boardrooms saying to themselves, “Well, looks like that Facebook-for-business thing caught on after all. Guess we should buy ‘em. That’ll make our decades-old system better, right?”

It may not be so simple!

As Larry Dignan from ZDnet said, “Color me skeptical, but I doubt all of these bolt on deals will suddenly result in social enterprise nirvana.”

We doubt it too. Microsoft is only just realizing what everyone has known for years: it is embarrassingly behind on its social strategy. It built a suite of products that should be social—Office 365 and SharePoint for example—but just aren’t.

So for Microsoft, Yammer is a delightful addition that it may keep as a standalone product to avoid annoying its user base—like Skype. Alternatively, it may choose to dissolve Yammer and attempt to absorb users into its existing software suites (undoubtedly with ‘all-new’ activity feeds…) like any number of the 146 companies that Microsoft has acquired to date.

And don’t forget Yammer’s acquisition of OneDrum, a content management solution, which Yammer snapped up to change its “Facebook-for-businesses” image by making collaboration more content-centric. In contrast, Microsoft wants to make its content-centric applications more social.

And then there’s Huddle.

The intelligent content collaboration platform built for the enterprise, Huddle has long been responding to what organizations are demanding. Business and government organizations alike want to be able to store, discover, share and work on content with others securely in the cloud. Huddle simply helps people to get their jobs done and CIOs can relax safe in the knowledge that data is stored and shared via an enterprise-class tool.

From Huddle’s perspective, this merger provides further validation of the space we’re playing in. And with our focus on intelligent, secure collaboration, we are leading the pack rather than playing catch-up to fill in the gaps. With more than 100,000 organizations using Huddle worldwide, including 80% of the Fortune 500 and a majority of the UK central government, you don’t have to take our word for it.

Aaron Endre

PR Manager, United States


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