Microsoft is rumored to be finalizing an acquisition of Yammer, with an announcement due imminently. The press speculates a purchase price of up to $1 billon. In general the commentary on the topic was best summarized by Forbes who asked: "Salesforce.com Buys Buddy Media for $689M; Oracle Took Vitrue. Who's Left for Microsoft CRM?" – framing the context of the pending Yammer announcement to be all about the CRM marketplace.
What does this mean for Microsoft?
Microsoft's Dynamics CRM has been adding social capabilities in each of its last releases, including activity feeds, walls, hash tagging, chat, screen sharing, and follow functionality. Adding Yammer, which already offers an integration with Dynamics CRM, would accelerate the feature mix well beyond Microsoft's published roadmap.
Adding Yammer to the Microsoft CRM offer would be a big win - no doubt. But at a billion dollars, we can be sure that Microsoft's acquisition of Yammer is about a lot more than making CRM headlines and playing catch up with Mark Benioff, as many have speculated. Microsoft has a much larger market to introduce Yammer to. Microsoft should (and surely will) target its enormous Office market, particularly via its flagship cloud offering, Office 365, with a social collaboration tool like Yammer. Microsoft's current collaboration tool, SharePoint, has been a powerhouse for document management and "semi-structured" collaborative exchange (Task Lists, Calendars, etc.) but has underwhelmed in the truly unstructured, streaming nature of social collaboration tools. Adding Yammer's Facebook-style user interface to the mix would be huge addition. Yammer already provides SharePoint –extending functionality, so it is a natural drop-in to Office 365.
The beauty of Microsoft's position in the marketplace is that a feature added to any one of their products provides that feature to many products for the Microsoft customer. For example, integrated presence, chat, and screensharing provided by Microsoft in Office 365 works natively (and automatically) within Outlook, SharePoint, CRM, and other Microsoft tools. Likewise, a Yammer offer within Office 365 is feature added across the Microsoft suite of business technologies.
If Microsoft proceeds with an acquisition of Yammer, they should do 4 things quickly:
- Integrate Yammer's authentication/user administration/billing features with the Office 365/CRM infrastructure, allowing single sign-on, Active Directory federation, etc.
- Extend Lync integration deeply into Yammer so that users receive the full presence/communicate capabilities of Lync within Yammer's user interface.
- Clarify the SharePoint/Yammer mix – the feature differences are clear but organizations need to better understand how to use both together, and where Microsoft is headed with SharePoint versus Yammer.
- Mature Yammer's already-published API to empower Microsoft's partner network to create the best "better together" scenarios. Looking inside CRM for example, partners will extend Yammer and Dynamics CRM to offer better use cases for Sales, Marketing, and Customer Service. And that will happen at a faster pace than what Microsoft could do alone.
Meanwhile we are a couple of weeks away from Microsoft's R8 release of Dynamics CRM, which will include more social features, including like/dislike, more advanced following features, etc. With or without Yammer, Microsoft will continue to invest in a social user experience for Dynamics CRM. An investment in Yammer will take Microsoft's social enterprise capabilities beyond the walls of CRM.