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Microsoft may acquire Yammer social networking tools for SharePoint

Microsoft is in discussion to purchase Yammer, an enterprise social network. Industry watchers think it'll be a good fit with SharePoint.

Microsoft appears poised to scoop up Yammer for $1.2 billion in an attempt to modernize its SharePoint collaboration platform and other legacy tools.

For SharePoint to remain relevant, tools like Yammer will be necessary.

John Doyle,
director of technology and communications, Alure Home Improvement

The acquisition report came to light on Friday and though neither company has confirmed the deal, many IT industry experts said the union makes perfect sense.

Yammer Inc.'s social media tools would be a huge benefit to Microsoft's SharePoint product in that it would provide better social networking and external collaboration, said Robert Helm, vice president of research at Directions on Microsoft, an independent research firm based in Kirkland, Wash.

"Those are areas that SharePoint has started down, but it would help if it moved a bit faster," he said.

SharePoint offers some social networking features, but most companies don't use them, industry watchers said.

Meanwhile, Yammer is often referred to as the "Facebook and Twitter for enterprise" because many of its collaborative features -- such as chat and a wall for posting and sharing information -- are similar to features offered by those social networks.

"For SharePoint to remain relevant, tools like Yammer will be necessary," said John Doyle, director of technology and communications at Alure Home Improvement, a contracting company based in Plainview, N.Y. that relies on Yammer.

Yammer has an advantage over SharePoint in social collaboration because of its "cloud reach" and "significant customers on board that are already joint customers with SharePoint," Helm said.

The company claims it has five million customers, more than 85% of them Fortune 500 companies as of Q1 2012.  However, only about 20% of its customers use the paid version; the rest use the free version.

Not all IT pros are convinced of the deal's upsides.

"I guess I'm not sure what buying Yammer does, except make better the features people aren't using in SharePoint," said Dan Antion, vice president of information services at American Nuclear Insurers, a nuclear power plant insurance company based in Hartford, Conn. Antion uses SharePoint extensively for document management, but not much else. "Social is real contact between people."

Alure Home Improvement has moved away from email and relies on the paid version of Yammer to coordinate employees shuffling between job sites in real time.

"My hope would be that [Microsoft] wouldn't make it a requirement to have a SharePoint platform to utilize Yammer," he said.

Yammer could modernize SharePoint, Dynamics CRM

Microsoft needs a social media tool such as Yammer to make SharePoint relevant among the slew cloud-based, enterprise social collaboration platforms such as Jive, Igloo, Alfresco, Citrix Systems Inc.'s Podio and VMware Inc.'s Socialcast.

It will also strengthen Office 365 against competition from Google Docs, provide Microsoft with a Google+ competitor and make Microsoft's products viable alternatives to Inc., said Brad Shimmin, an analyst with Current Analysis, a research firm based in Washington, D.C.

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"The current climate is skewed towards socializing, so Yammer does give [Microsoft] some moxie to say, 'We're not just a legacy system -- we have a modernized solution on par with other companies,'" Shimmin said.

Salesforce purchased Buddy Media, Inc. in early June for $745 million to add social-marketing tools to its CRM platform and Yammer could offer the same benefit to Microsoft's Dynamics CRM product.

"Microsoft is trying to play catch-up to Salesforce, who changed the game beyond CRM with cloud app integration, Chatter and different features of that nature," said Patrick Harding, CTO of Ping Identity, an identity service provider based in Denver, Colo.

Even though social networking tools aren't all that common in enterprises now, "enterprise social will be considered passé in two years" he said, because the majority of business applications will have social features baked into them.

In April of this year, Yammer integrated its services with Microsoft Dynamics as a plug-in, offering universal search capabilities across enterprise applications and devices.

Given that Yammer also integrates in the same manner with SharePoint, Helm said, the more interesting aspect of this deal is not how Microsoft intends to use Yammer, but rather, into which part of the company Yammer will be integrated.

Currently, there are three different groups developing social networking capabilities at Microsoft. If the acquisition deal goes through, where Yammer ends up on the organizational chart could go a long way to determining the success of the acquisition, Helm said.

"Yammer is a young company that has grown up as a cloud service," he said. "Trying to fit inside a fundamentally on premises software company is going to be a challenge for the Yammer software engineers." 

Both Microsoft and Yammer declined to comment.

Let us know what you think about the story; email James Furbush or follow @JamesFurbush  on Twitter; like on Facebook.

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Does SharePoint need to be more social?
Sharepoint is long on promise, short on execution for years.
it not good at social.It should have the Newsgator functionality and also the social features need to be upgraded within 6 moths rather than 3 years
The bubble hasn’t popped yet and there’s tremendous value in social media. … But it’s wishful thinking to believe that others on the ‘me too’ bandwagon will survive

Do you have what it takes? Check yourself at topwebperson
More user friendly
Ultimately I see the dictionary going and pattern recognition comming. Collaboration will help us learn the new requirements.
Beyond the fact of life of building apps integrated with everything including the kitchen sink, this functionality wouldn't be of use to my organization.
Enterprise security communication, profile and messaging should be professional and differ from regular social networking
more people will use it
becuase discussion boards are old school and not interactive.
It's essential long term as "social" gets embraced inside business and (however grudgingly) supported by IT. 8 is a huge bet for M-soft. Overpaying is far less damaging than late(r) to market.
SharePoint is too heavy for simple document sharing and collaboration activities
sharepoint features should be more convenient to use and also such tips and techniques should be more convenient to use.
just more bloat to be added to a microsoft server product that most end users dont use or want
It has to be the main point of information for any employee, so that it needs to be more social and intuitive
I require the workflows to be more interating then going into menus and changing settings.. I think Sharepoint is great as it collaborates everything but needs the extra edge of social media
To keep pace with the social need of consumer, this is the best option to compete with other competent products in market.
This will make it more exciting amongst its current customers
SharePoint is great as a database, but the great thing about Yammer (on it's own or used in conjuction with SP) is that it is so simple. There aren't customizations, you can't change how it works - this is a good thing. It will always have current information and won't get bogged down. SharePoint has it's place, but is not the product for simple, timely communication.
Needs a more welcoming and familiar interface. SharePoint on it's own is quite sterile and intimidating. A social layer would increase usability and appeal to a broader base.
It is an old system that lacks new age tools and features for a younger work force.
OOB SP is not that social friendly.
Because its built in social tools are so feature poor. The wiki is barely a wiki. Blogging and microblogging is terribly weak. The Forums are almost unusable. These tools are not what people have become accustomed to going back several years.
bringing enterprise to social