So Microsoft has confirmed the rumored acquisition of Yammer for $1.2B. Here’s my thoughts;

  • Potentially this is a great opportunity for MSFT to create a fabric that spans their different enterprise products (Dynamics, Office, SharePoint) that’s a big big opportunity but I believe technology and platform hurdles will push that possibility well into the future
  • Microsoft gets to look “cool” and to at least jump on the Salesforce “social enterprise” bandwagon. That’s more of a validation for Salesforce than it is an opportunity for Microsoft – unless some serious message manipulation occurs and Ballmer starts evangelizing the social enterprise – that’s possible but unlikely
  • Yammer has big user numbers, but small (I’m suspecting) paid user numbers. Alongside that there is an element of shelf ware from paid users. Traditionally legacy vendors get a little despondent when they realize their shiny new thing isn’t going to print them money – I’m hoping the Microsoft is realistic about this deal in terms of its short and mid term revenue potential
  • Is the price too high? As a standalone deal yes, but as a true social fabric play no. However see above re the chances of Microsoft actually pulling that off
  • Existing customers (at least some of them) will be royally pissed by what they see as the potential end of a lightweight and useful tool. I’m not expecting any mass migration but I suspect that other social startups 9and even Salesforce’s Chatter) will see some customers moving over from yammer
  • Generally the deal validates the social enterprise space – which is good for all vendors
  • Cloud vendors without a compelling social story are going to be scrambling to find one – in particular NetSuite that is currently talking up Yammer as their own social component

More to come – watch this space…

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Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

  • you say “microsoft gets to look ‘cool’ and at least jump on the salesforce ‘social enterprise’ bandwagon” >> i’m not quite sure what you mean? are you suggesting that the act of buying a social media company gets them on the bandwagon? there have been elements of social media stuff in sharepoint for years, and in dynamics crm since last year. It’s not like they’re only just starting down this path with this acquisition.

    • Lightweight social that crosses application borders is something pretty new for MSFT. The key is finding the best blend of integration with “standalonedness” for Yammer post acquisition…

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