Microsoft should have bought Yammer two years ago
Editor's Note: On June 25, Microsoft announced acquisition of four year-old, enterprise social-networking startup Yammer, for $1.2 billion. A day earlier, in the midst of rumors, Chris Wright put the merger in context, in this sharp and insightful analysis.
Recent press reports claim that Microsoft has bought Yammer, or that they are buying Yammer, or that they at least want to buy Yammer. The scenario currently playing out isn't entirely clear, although the New York Times seems confident the deal is done. In reality, we won’t know the exact nature of what is going on until any paperwork is complete.
But the whole thing seems a little bit late to me. Why didn't Microsoft buy Yammer two years ago? Why are they only just getting round to it now?
For those that aren't familiar with Yammer, it is an enterprise social network that owes a fair bit to Twitter, rather than the likes of Facebook. At its core is messaging and communication between users, hence the Twitter comparison. The product's feature set has expanded in recent years, and now includes a number of additions that would be familiar to users of other broader social networking tools. Earlier this year the company acquired OneDrum, which allows it to go further and add document collaboration and sharing. Yammer moved towards being a complete enterprise platform, one that has very solid social-networking foundations.
This makes Yammer's likely purchase by Microsoft even more interesting. Microsoft SharePoint is another enterprise platform, but one that has never really got to grips with social in any useful way. In fact, SharePoint pretty much missed the boat completely when it comes to social networking. The early versions of SharePoint were born from very Web 1.0 team collaboration and document management tools, with a little bit of content management thrown in for good measure.
By the time SharePoint 2010 came around, May 2010 to be exact, Facebook had 500 million users. But years earlier, when SharePoint 2010 would have been on the drawing board, social networking was still in its infancy. That isn’t to say Microsoft wasn’t watching -- they invested in Facebook in 2007 -- but clearly the SharePoint team could only do so much. SharePoint 2010 does have user profiles, basic status updates, even rudimentary walls. But I’ve yet to see a really good social SharePoint implementation, certainly one that hasn’t required heavy customization or third-party software.
So where does that leave Yammer and its acquisition by Microsoft? Well, the obvious conclusions to draw: Microsoft wants to bulk up its social output, and will use Yammer to do this. Yammer already integrates with SharePoint but Microsoft must want to go further. In addition, the company probably wants the people behind the code, which is sensible. So at some point we will see lots of bits of Yammer inside SharePoint, Lync and maybe even Office 365. But I can't help feeling it is all just a bit late.
Right Product, Wrong Time
According to Microsoft, the next version of SharePoint is due out this year, with a beta coming any time now. New versions of SharePoint On Premise, SharePoint Online (as well as the rest of Office 365) and the Office suite are all expected. Surely the purchase of Yammer is too late to affect anything we are going to see in this slew of new products? Numerous SharePoint and Office professionals who are on the special advance preview program (I'm not) have played with these new products for months. I doubt they have kept a lid on an obvious incorporation of Yammer, no matter what NDAs they signed. From a commercial point of view, Microsoft isn't going to incorporate a product it might or might not own at some point in the future. And if the sale does go through this week then there obviously isn't time to do anything this late in the development lifecycle.
It seems much more likely to me that this is a purchase for the future. SharePoint Online has been incrementally updated since its launch last year. So maybe it will see some Yammer-style updates early next year. Maybe the first service pack for the full fat version of SharePoint will bring with it some new functionality. However, it might be another year before we see an update, and past service packs have brought little more than bug fixes.
So this deal just leaves me a bit cold. If Microsoft had bought Yammer in 2010, and put it at the center of this upcoming version of SharePoint, then that would be exciting. Microsoft could have used it to fuse social to the core of the behemoth enterprise tool. It could have launched the new SharePoint in a couple of months and really hit the mark with a fresh social offering. As it stands, I don’t really expect to see Yammer as a useful part of SharePoint for a year at least.
It just all feels a bit slow, a bit reactive, and a bit typically Microsoft really. And that's a real shame.