Ok news finally broke: Yammer is bought by Microsoft for $1.2bn. After the close of the deal, Microsoft will continue to invest in Yammer’s freemium, stand-alone service, and the team will remain under David Sacks’ direction within the Microsoft Office Division. Now what’s next with this acquisition, what are the changes we will see in the next few months and in what areas will Yammer put itself (or be put by Microsoft).
Office as the center
Yammer is now placed in the Microsoft Office Division, which means that integration with Office(including Office 365) in general is a likely first step. A logical next step since collaboration on documents and pages in Yammer has been poor over the few years. The first victim will be most likely Crocodoc that offered a bit of an integration, but is likely to either remain unsupported as optional third-party integration while there will be tight integration with a connector for Office to collaborate on documents, but also to upload them directly into Yammer. Which also means that Microsoft and Yammer might go head to head with Jive who was already offering a strong integration with Office and their social business suite.
SharePoint, though not as you think it would
Another logical step at first sight would be SharePoint. Since SharePoint is often positioned as the social piece within Microsoft’s suite. However the main design principle around SharePoint is documents, while Yammer’s main design principle is people. Those two won’t mix, unless SharePoint 2013 is such an overhaul that the basic design principles has changed. However I don’t believe that to be true, since it would be too radical for most of Microsoft’s customers. What I do believe is that the integration with Office as mentioned before could help SharePoint in making sharing documents easier and making collaboration a bit more human.
Skype and Lync
Even though not directly in the Office suite, Skype is interesting, just as Lync. Yammer already has a way in which it shows presence (who’s online), it would be just a small step to integrate Skype with it, especially in the same way Microsoft did it with Skype in Facebook. Of course a link integration can be a premium for paid Yammer networks.
Azure
The downside for some organisations is that Yammer is only available as a full SaaS solution, hosted in the US. Microsoft has a big play with Azure where it could create an optional private cloud in which Yammer could be deployed in a managed way. Also since Microsoft has many data centers, hosting in Europe or in Asia could help in adding extra performance and lower response times.
Dynamics CRM, head on with SFDC
Dynamics CRM would be a very strategic play of both Microsoft and Yammer. Nowadays SFDC put Chatter as the social glue in the service and sales cloud offerings. And it doesn’t have to be said that Chatter was inspired by Yammer at least. By integrating not only Yammer into office, but also by integrating it more with Dynamics CRM it could eat a big part of the pie that SFDC is looking at. Especially since it is to be expected that Microsoft should be able to integrate enterprise social networking a lot better in Office than SFDC is able to.
Surface
Microsoft has an enterprise footprint which is huge and Microsoft is introducing the Surface as a new important part of their overall mobile and Windows 8 strategy. Having a good and tight integration with their productivity tools that go beyond Office and therefore include Yammer could be important. On the other hand, is the Surface so important that just for this Microsoft is willing to pay $1.2bn? I don’t think it is that important.
Rise of the suites
After the latest acquisition of IBM, SFDC, Oracle, Adobe and SAP it is clear that we are at the start of an acquisition spree in the social business space and particular the enterprise space. It is the rise of the suites and none of them focuses on enterprise collaboration and productivity, now Microsoft does and let the other guys to fight about the social marketing and analytics space. Smart move, now a smarter execution is required to stay ahead.
Just carry on with Yammer
Why would things all of a sudden have to change? We all might think that Microsoft might try to push Yammer in certain directions it shouldn’t be going, however will they? One of the best kept secrets of Microsoft is that they are a good supporter of open source. Microsoft is also big enough to just add a complete product without having to integrate it all and let it grow more organically and by allowing it to integrate with many things and not just Microsoft products and platforms.
Not so big of a deal
Of course $1.2bn is a lot of money, especially when you are acquired in cash. However for Microsoft it is not that much of a deal. It is just as much money as they paid for Visio, Navivision, Fast Search which are not really flagship products. Plus it is a lot less than de $8.5bn Microsoft paid for Skype and to put more perspective to it the net income of the record-breaking Q1 of 2012 was nearly $6bn. So it might even be that Yammer is just a strategic asset for them on the long run as a differentiator or as something that makes certain products more complete, instead of something that is driving change in the short run.
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