SocialText goes after unmanaged Yammer users

SocialText is going after Yammer with a reduced cost migration offering. Will it work? What are the real issues?
Written by Dennis Howlett, Contributor

SocialText has announced a program that will allow Yammer users to migrate to its offerings while saving money.

Press release.

These types of announcement are fraught with risk because there will always be some bright spark who thinks of this as negative marketing or is looking to conflate a technology war story. But when you dig a little deeper then it is easy to see why SocialText might make this offer.

In the press release, an analyst at Gartner is quoted as saying:

“Despite its potential to achieve benefits, it will be difficult for microblogging as a standalone function to achieve widespread adoption within the enterprise,” writes Jeffrey Mann, a research vice president for collaboration at Gartner, Inc. “While mainstream enterprises are unlikely to adopt standalone, single-purpose microblogging products, we expect that microblogging will spur interest as an important contributor to activity streams."

My short cut for that goes back to 2008. Content without context in process is meaningless. That is why the original iteration of ESME was built as a layer on top of the SAP NetWeaver stack. [Disclosure: I was part of the original ESME team.]

SocialText argues that a suite of collaborative social tools will always win against stand alone solutions. I agree. It has always been a major weakness of microblogging platforms that they are essentially a feature set within a much more important category. Therefore any company selling on the premise that microblogging for the enterprise can win is on to a loser.

Yammer's business model is one that ensnares IT into paying a non-budgeted line item it does not have. In the initial stages, you can have as many Yammer users as you want. For free. IT likes that. As an aside, VCs love it because it provides the mechanism for the service to go viral. The moment you want to administer those users you get a bill for $5 per user per month. That's not so bad if you are a 10,20,50 person business but when you are an enterprise of 1,000 and up then you have a real cost issue. In fact it is almost impossible to run Yammer for any period of time without administering the account. How else for example do you remove someone from the system?

Eugene Lee, SocialText's CEO responds: "When comes the time to pay for administering users, customer don't like that. They feel it is a bad way to do business. We're never going to hold a gun to our customer's heads." SocialText still wants a fee which they promise will be 20% below Yammer's price. Isn't that the same thing by a different name? "We've never lost to Yammer on price," says Mr Lee. I don't doubt it. Microblogging can be a giveaway as Salesforce.com with Chatter has finally realized.

Having said all of that I know of instances where there are 2,000 and more Yammer accounts that are not being administered. That's perilous behavior.

Yammer has other disadvantages. It is only available as a public cloud service. Some will argue that's not an issue. It is with enterprise which wants control over its environment and especially over socially oriented software. SocialText will sell you an appliance if you want. I also hear occasional grumblings about support and security with Yammer though precise details tend to be sketchy.

The broader question is not about whether Yammer and SocialText are going to war in some sort of media inspired stand off. It is about the process issue. It is about how SocialText, with all its ability to marshall social signals that are generated through its collaboration suite plays with back end systems. "I am even less worried about [SAP] Streamwork than I am about [Salesforce.com] Chatter," says Mr Lee, adding that: "people want to be liberated from operational silos. That's very different from thinking about social software as merely an add on to existing transactional systems. It is a different mindset." That's right but it still doesn't get past the point of understanding how the technologies will fit together. That's tomorrow's playbook.

Update: Thomas Vander Wal reminds me that Yammer offers a collaboration suite but it is a first iteration, not seventh or more so it is missing out on understanding the social and business complexities inherent in enterprise class solutions. At the risk of getting caught up in semantic and definitional wars, I view SocialText as a comprehensive, enterprise class collaboration suite while I tend to think of Yammer as a microblogging tool that has add ons.

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