Is Microsoft's social enterprise bet paying off?

Summary:Yammer is getting integrated ever more deeply into the Office experience. Dion Hinchcliffe and Eileen Brown debate its progress and prospects.

Dion Hinchcliffe

Dion Hinchcliffe

Yes

or

No

Eileen Brown

Eileen Brown

Best Argument: Yes

74%
26%

Audience Favored: Yes (74%)

The moderator has delivered a final verdict.

Opening Statements

Microsoft using ecosystem and SharePoint installed base to make Yammer a leader

Dion Hinchcliffe: While some scratched their heads when Microsoft acquired a competing enterprise social tool, the latest product roadmap shows how SharePoint and Yammer will not only co-habitate but leverage key strengths from each other. Key to this strategy is that Yammer was "born social" and it's generally a cleaner, more user-friendly product for social-style workforce collaboration. Growth data from Yammer itself is strong, adding millions of new customers in the last year.

Also key is the addition of compelling new integration features such as enhanced groups that allow enterprises to create a group once that can then be used across Yammer, Outlook or SharePoint. This will create a highly desirable seamless social environment in Microsoft shops across their top communication and collaboration platforms. It will also allow cross-over growth from one platform to the other.

Yammer - still the Microsoft outsider for social business collaboration

Eileen Brown: Yammer has been well and truly absorbed by Microsoft after its acquisition last year. But is it the big Enterprise success that Microsoft hopes for?

Sure, it has been deeply integrated into Office 365 -- but not SharePoint -- which is still the tool for collaboration in the Enterprise. SharePoint still has its own social feed, search and document management features which stand apart from Yammer’s offering. Lync has been tightly integrated into SharePoint from early Office Communications Server days and has most of the features that Yammer has.

So why has Lync, the enterprise collaboration product been pushed aside for this new acquisition? Less than 20 percent of Microsoft’s own staff currently use Yammer regularly to collaborate. I think the company will struggle to get other Enterprises to adopt Yammer when it knows that its own internal social business strategy still has a long way to go.

The Rebuttal

  • Great Debate Moderator

    Welcome back to our Great Debate

    This week's topic is Yammer and our debaters look ready to go. All set?

    Posted by Larry Dignan

    I'm good to go

    Look out Eileen.

    Dion Hinchcliffe

    I am for Yes

    Let's get started

    Does Yammer really fit?

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Strengths

    What are Microsoft's strengths in the social enterprise?

    Posted by Larry Dignan

    It's a one-stop shop

    With the acquisition of Yammer, Microsoft finally has a credible and capable pure-play social platform to offer customers. However, the software giant still can't offer every collaboration capability that a large enterprise will need, and this is where the Yammer app directory strategy and other products, particularly SharePoint, can come in and offer a more nuanced, robust, and virtually complete offering that goes well beyond social features. If Yammer and its apps can't do what you want and you're willing to invest, Microsoft has a vast platform in SharePoint that can be extensively customized. And they have a large and quite mature partner ecosystem that provides the expertise to do it. Their strength really is in having social features and marching product set for just about every size company and need.

    Microsoft now has what's needed today terms of fundamental social enterprise features, from simple, easy-to-use lightweight tools (Yammer) to a truly rich and sophisticated platform (SharePoint) that can be turned into just about any kind of socially-powered intranet, business application, or communications/collaboration solution that an enterprise might need. Thus their biggest strength currently in this space is having a full spectrum of offerings that makes them practically a one stop shop for social collaboration.

    Dion Hinchcliffe

    I am for Yes

    Collaboration

    Microsoft gets collaboration from a software point of view – it has been dominant in the collaboration space for a long time. From the consumer point of view it has been in the social space since it introduced MSN messenger in 1999. In the Enterprise since its introduction of Live Communications Server in 2003 Microsoft has successfully proved its capabilities in the collaborative (social) enterprise for over ten years. Integration with Microsoft Exchange its messaging product, Lync Live meeting and SharePoint gives the company a collaboration suite that is second to none.

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Weaknesses

    Where does Microsoft fall flat?

    Posted by Larry Dignan

    Needs more focus

    Microsoft currently has a very tool-focused approach to the social enterprise, and one that is really focused on collaboration, more than external features like social CRM or supply chain. They've also frequently been a little behind the curve in realizing the latest innovations in social media within their products. If you adopt their social tools, you may not get the latest social features (particularly with SharePoint.)

    Perhaps more importantly, you certainly won't get a lot of guidance from them understanding the vital cultural and organizational issues involved in driving results for the social enterprise with their applications. It's key to realize that social enterprise is really about re-organizing people and how they work, the focus on which is more critical than just having good supporting applications. With Microsoft, if you already know what you're doing with social enterprise, they have very viable enterprise-grade options now. Unfortunately, they can't help you nearly as much with the human element, which must be the focus when realizing the social enterprise more than it is with most other IT applications or systems.

    Dion Hinchcliffe

    I am for Yes

    A lack of longevity

    Microsoft spends a lot of time disrupting its staff with reviews, business realignments and reorgs. This causes a lack of team longevity and inconsistency in its operations – which look disjointed and unconnected to the outside world. For example, Bing in its various incarnations has been around almost as long as Google has.

    Bing was originally launched as MSN Search in 1998. Team reorganizations, product renaming, feature forking and staff movement has slowed Bing’s attempts to dominate the search market.  Live Communications Server, Office Communications Server and now Lync shows a similar pattern. Different leaders in the product teams want to “make their mark” on the product in order to advance in their career at Microsoft and rename and realign. This is potentially at the expense of driving product awareness and brand stability. Other software products also have the same issues.

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Life without Microsoft?

    Could Yammer have survived alone without the Microsoft acquisition?

    Posted by Larry Dignan

    Yes, probably

    As Yammer had decent traction and was an early market leader in microblogging. But Yammer would have had a far more limited existence without Microsoft. At the end of the day, SaaS products have to turn a profit and pay back investors. That requires a relatively large customer uptake combined with a decent pricing model. Achieving both is increasingly hard in an ever more competitive market for software, especially the crowded social enterprise space, for which hundreds of "enterprise-class" products currently compete.

    Dion Hinchcliffe

    I am for Yes

    Yes

    Yammer could have been a formidable product in its own right. Yammer was becoming a powerhouse for social collaboration across the enterprise. It was completely suited for integration with an appropriate software solution. Correctly placed it could have become the market leader for both customer relationship management solutions and social collaboration.  Yammer was ripe for acquisition by a large organization such as Microsoft, Google or IBM and Microsoft probably bought the company as a strategic move to prevent its competitors buying it.

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Standing alone

    Can enterprise social networking tools stand alone as a product category?

    Posted by Larry Dignan

    Less impact at work

    That's increasingly the debate. Social tools by themselves have fostered rather amazing outcomes out in the consumer world. But when they've moved into the workplace, those same applications often have less impact. So we're learning that in the enterprise, social collaboration has to be closer to where the work gets done. Microsoft has clearly seen this and is connecting Yammer, SharePoint, and Outlook together so that work documents, e-mail communication, instant messaging, and other modes of collaboration and data are all connected together closer to where the work activity is. This is a smarter strategy that ensures there's room for both general-purpose collaboration as well as socially-powered processes integrated directly with work artifacts and activities.

    Thus enterprise social software suites -- even as they add integrated capabilities like this -- will likely remain their own product category, particularly as there's no other natural home for their functions except perhaps in unified communication. But that industry has generally been surprisingly slow to pick up on adding social to the mix.

    Dion Hinchcliffe

    I am for Yes

    It already 'works'

    Yes – messaging systems already stand alone as a product category – just as LOB Databases and systems management systems do. When staff wish to interact with other staff they can go to their chosen “watercooler” social networking tool – whatever they happen to choose and download from the enterprise app store -  and spend time interacting with their peers at a time suited to them. 

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Who's better?

    Who do you think is integrating the social enterprise better and why?

    Posted by Larry Dignan

    Yammer has the support

    One of the single most significant challenges with the social enterprise are the silos currently springing up as an array of new social tools enter organizations from every direction. Inbound vectors include social software in mobile app stores and via SaaS services to new social features added within existing enterprise IT suites.

    There are two types of integration to consider here: Integration between social software applications themselves is the first form of integration that we need to address, but unfortunately this has been an issue that social enterprises have been slow to solve. Unlike e-mail applications, you generally can't communicate between two social tools, which seems a little odd when you think about it. The standards community is working on interoperability, but for now, pro-active enterprise IT strategy is about the only ready solution to prevent social islands and fragmentation of communication.

    The second kind of integration is between social networks and enterprise apps, which have the business data people want to collaborate over. This is more promising as the standards have matured to enable this, including OpenSocial (disclaimer: I'm on the board of the OpenSocial Foundation.) Fortunately, it's fairly easy today to integrate common IT applications right into users' activity streams within enterprise social networks (ESNs) in most of the leading social enterprise tools. Unfortunately, Microsoft SharePoint has limited support for integration of applications with its social features. However, Yammer does readily support a standard called Open Graph that can make this possible.

    Dion Hinchcliffe

    I am for Yes

    Salesforce, IBM, igloo, Mindlink and Jive

    Salesforce has a good holistic view of the customer from end to end and its products work well in many scenarios across both B2B and B2C customers. IBM has been hiring talent across its organization to help it build its social enterprise offering, and is making great strides to become a social business. For smaller organizations, offerings from companies such as igloo, Mindlink and Jive help enterprises and  SME’s to become more social.

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Help for Yammer

    What is the most valuable Microsoft product to integrate Yammer with?

    Posted by Larry Dignan

    Its business apps

    The most valuable apps to integrate with social tools are usually the ones that have relatively high ROI in social enterprise scenarios. These tend to involve highly variable and collaborative-centric activities, such as CRM (Microsoft Dynamics), ERP (Dynamics again) with exception handling being an especially strong scenario, project management (MS Project), and group content creation, editing, and management (Office 365, which is already staring to happen.)

    Dion Hinchcliffe

    I am for Yes

    Dynamics

    Yammer could bring great value to Microsoft Dynamics for small and medium enterprises. When pursuing opportunities, some sales potentially fail to close due to insufficient information about customer conversations.  Integrating Yammer into a product such as Dynamics would give the product a valuable social component, capturing conversations and actions that get missed out on other CRM systems such as Siebel. Having the ability to tie a “just in time” phone, email or IM conversation to a sales opportunity would give the sales team a fuller picture of client activities to be able to close deals with enhanced knowledge. Alternatively Yammer must stand alone as the key product to build out Microsoft’s new social business strategy suite.

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Quantify returns

    How do you quantify the returns on the social enterprise?

    Posted by Larry Dignan

    Measure the processes

    The easiest way is just to baseline what you were doing before you update your processes to include social tools. Then afterwards, measure if those processes are happening more quickly on average, if the outcomes better, and if their recipients are happier. This is a good way to optimize your social enterprise efforts as well, as you have good business-centric measures that you can use to zero in on benefits and so you can manage to them.

    Dion Hinchcliffe

    I am for Yes

    It's the bottom line

    Returns must result in an increase in revenue when you consider the bottom line of a business – but the perception of the business can also have a major impact on its bottom line. Having an effective social enterprise with employees sharing information across the business will ensure everyone throughout the team is on message and working together to improve perception about the business, increase reputation, enhance product quality and ultimately elevate sales. After all, ultimately it is all about the numbers.

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Measure returns

    How should Microsoft measure returns on the Yammer purchase?

    Posted by Larry Dignan

    Gains in revelancy

    That's tougher, as running the P/L by itself just for the Yammer acquisition plus the downstream R&D and marketing/sales to grow the product is probably going to take quite some time to turn positive. The reality is that the more you pour in to grow a platform, the longer it takes to get your investment back. However, since Yammer is part of a larger software portfolio from Microsoft, and especially with Yammer being a category leader, it helps Microsoft tell a story about how it's keeping up with the times. This will help lift the rest of the Microsoft's productivity products, some of which are the more widely used and deeply penetrated in the history of software. It's probably smart to look at it holistically, meaning that they should take credit for gains in relevancy just as much as the financial ROI.

    Dion Hinchcliffe

    I am for Yes

    Make it a vital business tool

    Yammer cost Microsoft $1.2 billion in cash in 2012. This was an expensive purchase for Microsoft which is why it is being positioned alongside SharePoint. The business division contributed 32 percent of Microsoft’s revenue in 2013. SharePoint sales contribute more to this revenue than the Dynamics business does. Microsoft therefore needs to reposition Yammer as a vital business tool for all enterprises that wish to collaborate using the SharePoint offering. It also needs to sell Yammer as a stand-alone tool for other businesses that want to start to communicate more effectively and that may not wish to have the extra features offered by Lync.

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Gaps in the front lines

    What gaps does Yammer fill on the social front for Microsoft?

    Posted by Larry Dignan

    Mid-market and small businesses

    Yammer was designed from the ground up to be social, and that's a major strength. SharePoint's social features have never been leading-edge or even considered to be on par with the industry. The acquisition lets Microsoft tell a better story about collaboration, give their customers a range of choices and made them an industry leader in social collaboration overnight. It also makes it possible to broadly penetrate the mid-market and small business market better with social tools, which has classically been underserved by the very size and complexity of SharePoint.

    Dion Hinchcliffe

    I am for Yes

    Adds more options

    Yammer allows people to follow conversations that have happened while users were not online. It enables two-way microblogging and “small talk” and one way broadcasts for “purposeful” messages. Users can dip into threaded conversations at a time convenient to them.  This feature is also possible in Outlook with threaded view. Yammer allows users to chat to groups of people. Persistent Group Chat is a feature available in Lync. The advantage that Yammer has is that it enables people to feel that they are having Twitter-like conversations in near real time with their colleagues across the business. These conversations stay safely within the firewall – unlike updates posted on Twitter, Google+ and Facebook.

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Improvements

    What can Microsoft do better with social enterprise tools?

    Posted by Larry Dignan

    It needs vision

    While I'd say that most of the moves the post-acquisition Yammer team has made have been good ones, there's a serious need for clearer and more overarching vision on social enterprise to match the capabilities of the tools themselves.

    Social analytics is another area where Microsoft has largely been content to let their integration partners lead, yet the capability is often key to measuring ROI, driving adoption, and realizing the deep insights from business intelligence that mixing big data techniques with social work streams can provide. Microsoft should offer native analytics that meets the needs of large customers so they can calculate their social enterprise ROI, drive adoption, support community management, and harvest opportunities from data insights.

    Dion Hinchcliffe

    I am for Yes

    Keep it uncomplicated

    Enterprises are moving towards an app based environment and Microsoft is recognizing this with its focus on developers creating apps for Windows 8.  If Yammer can remain as a standalone product – as Skype currently is – it can maintain its attraction for staff that wishes to use that particular app without the overhead of installing a product suite.  Until it switches its focus away from the holistic solution sell – where every product should be incorporated in every enterprise, - then users will turn away from bloatware in favor of an app that does exactly what they need – and no more.

    Eileen Brown

    I am for No

  • Great Debate Moderator

    The bundling strategy

    Microsoft has been bundling Yammer with Office 365 and SharePoint. Does that strategy make sense?

    Posted by Larry Dignan

    It works

    I think it does. It lets users choose the right communication or office productivity tool for the job. It's also on both Microsoft and the customer to make it clearer to workers which tools is best for what purpose, while also making it clear what all their options are. Fortunately, Yammer is about as straightforward and easy-to-use collaboration tool as there is. It consequently plays a strong counterpoint to the often-extensive upfront effort it can require to get the same results in the same scenarios from SharePoint. So offering the full-spectrum of options is a win for customer choice in my opinion.

    Dion Hinchcliffe

    I am for Yes

    It doesn't work

    No – but it does make sense for Microsoft in terms of its big bet this year. Microsoft is wholly focused on the cloud and Azure solutions and bundling everything it can into its cloud and office 365 solutions. However, many enterprises – for various reasons including bandwidth, availability and product longevity – still want to keep hardware and software offerings in house. Yammer should be offered as a standalone product with connectors into its other enterprise offerings. This will enable innovative enterprises can use Yammer to enhance new business processes that Microsoft might not have yet thought of.

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Work is social?

    What's your take on Yammer's tagline that work is social? Is it really?

    Posted by Larry Dignan

    Wihout a doubt

    Businesses are made up of teams of people working together to solve customer problems. Working together as team is a highly social process comprised of clear communication, easy give-and-take, sharing, consensus, and teamwork. Social tools are very capable at helping companies realize these traits more easily, naturally, and with more long-term payback via the accumulation of collective intelligence over time.

    Dion Hinchcliffe

    I am for Yes

    Motivation works

    If you consider that work is “a place you go to” and is not “something you do” then work cannot be social. When you fully embrace the sentiment that work is something that you do, wherever you want to, on whatever device, however you choose, then work can become a very social function. Having a collaboration suite that is used by the majority of staff to share information, energies and motivate teams can get you better results than the old fashioned siloed mentality of the individual working as a data entry clerk at their isolated green screen workstation. Only when workplace tools are easy to use, embraced by the workforce and used to improve productivity in the social business then work can indeed be considered to be social

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Muscle building

    Last question: What needs to happen to truly develop a social enterprise?

    Posted by Larry Dignan

    Changing mindset

    We should be clear that organizations are already very social today, just not as much as they could be. Inside the typical organization, it's still too hard to find people who know what you need to know, to locate important information, or collaborate beyond your local team unless you know everyone in the organization very well already. The vision for the social enterprise is that we have technology that can be used -- if we'll change our mindset a bit -- to considerably improve our ability to communicate and collaborate together.

    Dion Hinchcliffe

    I am for Yes

    Converations are key

    It is one thing having the tools in place if no one knows how best to use them. Fostering a social culture across all aspects of the business is key here. If employees feel that they can have open and frank discussions with staff at all levels of the business then organizational hierarchies will break down and conversation will flow more freely. Michael Dell often comments on conversations by staff on Chatter and staff feel that they can discuss topics freely across the enterprise. Other “social” platforms in enterprises have been policed by HR and the Exec team making staff reluctant to communicate on the platform in case they are singled out as troublemakers. Democratizing the conversation will become self-policing, Workers are aware of boundaries and work to collaborate to move the business forward and ultimately increase the bottom line.

    Eileen Brown

    I am for No

  • Great Debate Moderator

    Thanks again

    Once again our debaters did a great job. Don't forget to read the comments and add your own. Wednesday, we'll post the final arguments, and I'll give my verdict on Thursday. Please, don't forget to vote.

    Posted by Larry Dignan

Closing Statements

Exciting times ahead

Dion Hinchcliffe

While Eileen had some great points, especially around the ongoing IT demand for on-premise options for social enterprise, Yammer is clearly a major boost for Microsoft in making sure that it has a strong story for all of the big five IT trends of this decade (cloud, mobile, big data, consumerization, and of course, social.)

However, Microsoft still has to deliver on key parts of its social enterprise vision, especially seamless integration between its various communication and collaboration platforms (SharePoint, Office 365/Outlook, Yammer, Lync, etc.) Before this is achieved, the competing products have the potential to sow confusion and create analysis paralysis as users and IT shops both try to figure out which are the best tools for the jobs in any given situation. But I think that will be resolved soon enough.

In the end, taking into account Yammer's large installed base of 8M+ businesses and that it is an enterprise-ready, credible social tool that Microsoft is not likely to lose on its acquisition investment, there's not much risk or downside. As long as Microsoft follows through, they will have a scalable social enterprise solution for all businesses -- from the smallest SMBs to the largest enterprises -- that is also integrated into their larger enterprise solutions portfolio.

Ultimately, I give the successful blending of Yammer with the rest of Microsoft's products a high likelihood of success. So along with double-digit year-over-year growth, and the continued evolution of the product in exciting places like their application directory, I say Microsoft's social enterprise bet will indeed pay off.

Yammer: Great potential but needs more work

Eileen Brown

It is obvious that Microsoft has made a great decision in buying Yammer – and it makes good financial sense for Yammer to reside in the ‘cash cow’ business division there. But I believe that there will need to be more realignments of the Yammer brand before Microsoft can drive forward with its intentions for the enterprise social business. Yammer has several competitors snapping at its heels and if Microsoft takes its eye off the ball then it could lose valuable ground in the race to dominate the enterprise social business space.

Yammer as it is now will eventually transform into the Enterprise social product that Microsoft wants it to be. There will be iterations and changes in the product as Microsoft moulds it into its idea of what an Enterprise social software product should be – whether in the cloud or on premise. Hopefully the Yammer of the future will still resemble the Yammer we know and love now. Hopefully it will not lose its social identity and value as it becomes fully integrated -- and shaped -- by the by the business division it now belongs to.

Win by a smidge

Larry Dignan

This debate was tough to call as both Eileen and Dion really made some good points and framed their arguments well. Reading both sides of the debate was informative. Overall, I'll go with the crowd and give Dion the win by a smidge.

Topics: Great Debate

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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