Microsoft, Yammer and the land grab: Social enterprise lunacy

Microsoft, Yammer and the land grab: Social enterprise lunacy

Summary: Microsoft may be spending more than $1 billion on a social UI for SharePoint. Couldn't one of Microsoft's many skunkworks teams build something similar?

SHARE:
29

Microsoft is reportedly close to buying Yammer, a privately held social enterprise vendor, for more than $1 billion. The deal highlights how the big guns are chasing social enterprise at all costs and defying a good bit of logic.

Is this worth more than $1 billion?

On the surface, Microsoft's move to acquire Yammer makes some sense. Yammer is fast growing---at least that's the perception. Microsoft doesn't have a cloud social collaboration tool. And Yammer can fit into Office, SharePoint and Dynamics. And the biggest reason Microsoft is buying Yammer is the most simple of all: Salesforce has nailed the social enterprise lingo and Microsoft can't allow Marc Benioff to have all the good punch lines.

To wit:

  • Salesforce.com buys Radian6, BuddyMedia and touts social enterprise as it chases chief marketing officer dollars.
  • Oracle buys Collective Intelligence, talks social relationship management and its social cloud.
  • VMware buys SocialCast.
  • Jive Software, Traction, Moxiesoft, Huddle, Social Text and other social plays are all acquisition targets. The acquisition window---and values of social enterprise plays---may also be closing depending on whether Jive's second quarter earnings shine or flop.
  • Microsoft eyes Yammer.

Color me skeptical, but I doubt all of these bolt on deals will suddenly result in social enterprise nirvana.

Also: Microsoft to marry YammerWhy a Microsoft buy of Yammer would be good for social businessThree more reasons Microsoft might buy Yammer

Regarding Microsoft and Yammer, Wells Fargo analyst Jason Maynard said:

SharePoint is sort of social. It is an enterprise collaboration tool, which has been associated primarily with document management. It does not have the ease of use, and familiar UX like Yammer or Chatter. Yammer would significantly enhance the usability of Microsoft's productivity tools, in our view. As a result, we think this means vendors like Salesforce.com must address their product hole in the cloud file management arena.

In other words, Microsoft may be spending more than $1 billion on a social UI for SharePoint. Couldn't one of Microsoft's many skunkworks teams build a SharePoint activity stream that can compete?

The Microsoft-Yammer deal is a bit nutty if UI and SharePoint are the main drivers.

Tony Burne at Real Story Group laid out what Yammer means for Microsoft:

A more plausible theory is that Redmond fears that on the social front, SharePoint 2013 will prove the same disappointment as SharePoint 2010. SP 2013 is about to get released to beta, but early whispers suggest that Microsoft did not enhance the platform's social features to the extent everyone expected. Unmet expectations are the stuff of serious revolts.

Now Redmond can deflect most criticisms of SharePoint 2013 by pointing to Yammer's existing capabilities along with Yammer's rather fanciful roadmap.

Another theory is that Yammer matters much more for Microsoft's Dynamics CRM, which needs a social hook to compete with Salesforce and Oracle.

In the end, Yammer's appeal to Microsoft is largely a defensive move to play the social enterprise game.

Oliver Marks noted:

The battle for supremacy amongst the old guard of Microsoft, IBM, SAP and Oracle (’MISO’) is not unlike Elephant Seals battling for control of the beach and the rights to sire future generations, except that their beach is now of questionable relevance and there are deep seated concerns about past dominance and maintenance contract price gouging. One vendor hand to shake and one throat to choke may have worked in the past, but the one suite approach is of questionable value going forward.

Bottom line: It's not clear that buying social enterprise plays and slapping Facebook and Twitter user interfaces on everything will work. Customers should prepare to cut through the social enterprise spin accordingly.

Topic: Social Enterprise

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

29 comments
Log in or register to join the discussion
  • Enterprise Customers who do "get" social, reap the benefits quickly

    Assembling virtual teams across an organization that is geographically dispersed throughout the world is a major benefit of social. Now, I do not have to rely on the "engineer" in my building who is more of an analyst to build my widget when I can find the best widget engineer in the company. Likewise, finding widget project managers, widget designers, and widget manufacturers in my organization is nearly at my finger tips.

    So...is $1 billion a lot for Microsoft to spend? perhaps. But, what would an integrated yammer to my company mean? It would be priceless and achieve its ROI within one or two successful projects.
    Your Non Advocate
  • Thank you

    I am firstly here today. It's very helpfully for me.thank you
    debugs
    • Go away, please...

      Go do this "first" crap over at YouTube or Facebook or one of the hundreds of other sites that are more frequented by 13-year-old girls. Let us adults have our adult conversation time.

      Please and thank you.
      daftkey
  • Sure, Microsoft could probably build something..

    "Couldn???t one of Microsoft???s many skunkworks teams build a SharePoint activity stream that can compete?"

    Sure - if they aren't working on other projects, and if they have capacity enough that Microsoft doesn't have to hire anymore programmers anyway.

    Or, Microsoft could do something they've proven over and over again that they are actually pretty good at - acquiring established software players and integrating them into their own ecosystem. The up-front cost may be a lot (or not, considering Facebook managed to convince people to give them $16bn on a wink and a promise, $1bn seems pretty cheap these days), but the advantage is an already established consumer base, and a product that is ready to integrate into their current offerings now, instead of a year from now.
    daftkey
  • Perhaps Microsoft looked at building their own,

    foresaw possible IP litigations in the future, and decided it would be less expensive to
    buy a somewhat working solution? Just a thought.
    wizard57m-cnet
  • YAMMER (WTF IS THAT)

    MICROSOFT GOT THE IDEA FROM ME LAST WEEK I SENT MICROSOFT AN EMAIL ABOUT A WEBPAGE I INVENTED CALLED ((YAPPER)) THAT WOULD GO INTO COMPETITION WITH FACEBOOK I HAVE ALL THE BLUEPRINT FOR MY WEBPAGE BUT MICROSOFT DECLINED MY OFFER SAYING IT WAS IN ((EARLY STAGES OF DEVELOPEMENT)) AND THEN THEY GO AND BUY ((YAMMER)) THAT WAS DIRTY ON THERE PART I MEAN COME ON BUT EVEN MICROSOFT CANT GO INTO COMPETITION WITH MY WEBPAGE IDEAS email me ciscojohnson916@yahoo.com
    ciscojohnson916
  • ((YAMMER))

    I HAVE THE EMAILS FROM MICROSOFT AS WHERE I EXPLAINED TO MICROSOFT THE IDEA LAST WEEK AND THERE RESPONSE THAT TICKS ME OFF I MEAN I THOUGHT WE COULD TRUST MICROSOFT BUT ITS CLEAR THAT THEY DONT CARE ABOUT THE PUBLIC BUT THE NEXT DOLLAR THAT THEY CAN MAKE
    ciscojohnson916
    • People - this is why you don't send unsolicited ideas to corporations..

      Let's pretend for a second that Cisco is telling the truth, and that he did, in fact, email Microsoft with his ideas.

      Two things could have happened:
      1) Microsoft may already have been working on plans to buy Yammer. This is probably the case, given that billion dollar deals rarely get to the point of publication within a week. Having an idea to compete with the lead dog in what's still a relatively new market is hardly rare.

      2) Microsoft could have ripped off Cisco's idea. Sure, that would be underhanded (and arguably, par for the course for Microsoft), but barring any non-disclosure agreement (which likely wouldn't have been signed), or patent of any kind owned by Cisco (doubtful), Microsoft isn't breaking any rules here.

      In either case, this is why most corporations specifically state that they do not wish to have non-solicited "ideas" sent to them, and that they reserve the right to use any unsolicited ideas without offer of any compensation.

      In other words, Cisco, you're best bet is to probably go suck a lemon, then think up some new idea that you can actually sell to someone who is willing to invite you into an office, sign an NDA, and pay you for your idea, should they agree to use it.
      daftkey
      • Just to be clear:

        ..I'm referring to "ciscojohnson916" here, not Cisco corporation (who probably would have been much smarter than to email Microsoft with ideas).
        daftkey
    • I have seen many people yammering for attention, here

      yet at least the others are more creative, and less obvious.

      Good-bye
      John Zern
  • Related

    Relates News http://submad.com/800-microsoft-to-buy-yammer-4.html
    tubieso
  • ((YAMMER))

    MICROSOFT WOULD HAVE NEVER HAD THIS IDEA IF IT WASNT FOR ME MICROSOFT CAN I AT LEAST GET A THANK YOU I MEAN THATS CRAPPY THAT YOU WOULD BURN SOMEONE LIKE THAT
    ciscojohnson916
    • Put up, or shut up!

      If your idea had been so great, and if it really were to be a good, or even an adequate, competitor to Facebook, or even MySpace, then, you should've looked for your own avenues, and your own investors, to get the idea rolling.

      You probably expected MS to investigate "your" idea, and, hoping that they'd be interested, you either expected them to purchase your idea, or to partner with you. It's a lot easier for a company such as MS to get their hands on the whole pie than to have to "share" with some unknown entity. The ideas behind Facebook and MySpace and Google+, are not so original anymore, and, if there is one out there that is already proven, then that would be the one to go after, and not some, as of yet, unproven startup or idea.
      adornoe
  • Let's see how this might go...

    "OMG LOL ROFLMAO me just upld doc to sharepnt."

    Yeah, that makes a whole smokin' lot of business sense. I can see the ROI from here.
    Vesicant
  • The make money off patents campain continues.

    It's not because microsoft can't make it, it's because they want to start charging consumers that are already using it. There may be many other 3rd party services that might be using yammer integrated into their products. Now MS can cash in on it with out even lifting a finger. 1 billion to the right for a boat load of new pattents to nickel and dime a market share you were never a player at is priceless.
    Bakabaka
    • Ummmm, no Yammer integrates with SharePoint

      If you drew a Venn diagram containing Yammer's client base and SharePoints client base, they would nearly overlap. I am guessing you are not familiar with either Yammer or SharePoint and are just disgorging nonsense.
      Your Non Advocate
  • Sure MS could create one

    But then they would actually have to compete for customers.

    MUCH easier to just buy them. There would be no competing necessary, and - as already noted - you already have customers to screw over.
    jessepollard
    • Yeah, just like they bought the XBox and Windows customers.

      n/t
      adornoe
      • Didn't even compet for Windows customers

        They coerced exclusive contracts with the vendors... and now by reducing their prices and giving kickbacks in the name of "advertising".
        jessepollard
      • jessepollard: Stop being so naive...

        In the business world, the Microsoft's of the world do what it takes to grow a business and maintain it at a high level of competition.

        When it comes to contracts, exclusive or not, everybody does it, including Google and Apple and IBM and any other company that wants to keep their clients.

        Cutting prices, on advertising or on products, is also a huge way for competing, and gaining customers. Any company that doesn't do likewise, would be highly stupid and might soon find itself looking at bankruptcy or watching the competition leave it behind in the dust.

        You would never be good for business or for management, since, you believe that, growing a business is just about creating a product or service, and then, waiting for the customers to beat down your door. Running a business is about being proactive, and not passive or reactive alone.
        adornoe