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Microsoft's Yammer buy raises questions about NewsGator's future

Juan Carlos Perez | July 2, 2012
When NewsGator Technologies decided to play in the nascent enterprise social collaboration market a few years ago with a product that worked only with Microsoft's SharePoint, it was making a big bet.

"Microsoft has told us: 'You guys are our premier social partner for the enterprise and we want you to be that for the long term,'" he said.

However, when asked for comment about NewsGator, Microsoft provided a statement that sounds less enthusiastic and supportive.

Asked whether it considers Social Sites the most tightly integrated enterprise social module for SharePoint, or at least one of the most integrated, Microsoft said: "We have a number of partners that use SharePoint as a platform to build high-value social solutions. NewsGator is one of these partners."

Asked to comment specifically on how the Yammer acquisition impacts Microsoft's relationship with NewsGator and the future of Social Sites, Microsoft said: "We have a number of partners offering strong connects to SharePoint for enterprise social. We have a great partner ecosystem and NewsGator is an important part of that."

Holston also believes that Microsoft's main interest in Yammer isn't its intellectual property but rather its successfully viral freemium business model.

In any case, NewsGator is focused on developing applications for specific industries, because the core set of horizontal enterprise social features -- such as microblogging, employee profiles, activity streams, sharing and joint editing of documents and content rating, tagging and reviewing -- are becoming commodities, he said.

Not only do pure-play enterprise social networking vendors all provide those horizontal features, but they are being added natively by broader collaboration and enterprise application vendors to their software stacks, he said.

"Our road map was always focused on taking advantage of higher value-added social business applications anyhow because of the assumption that horizontal capabilities would be provided by other means," he said.

This is the right approach for NewsGator, because there is no doubt that Microsoft will eventually meld Yammer with SharePoint, said IDC analyst Michael Fauscette.

"NewsGator needs to continue to figure out ways to differentiate itself," he said. "They're good software developers, have a good company and good products. Maybe they'll broaden their business and not depend mostly on SharePoint."

But even if Microsoft were to replicate Social Sites with the Yammer functionality in SharePoint, that process would likely take at least two years, Holston said.

And NewsGator has been working closely with Microsoft as the next major upgrade of SharePoint is developed, to make sure Social Sites is properly integrated and aligned with it, he said.


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