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What IT needs to know about the Microsoft-Yammer deal

Tim Greene | June 27, 2012
With Microsoft buying Yammer for $1.2 billion, Microsoft promises it will push the business collaboration/social networking platform into more of its cloud-based services. That means corporate IT pros will have to deal more with Yammer in their day-to-day jobs. To help prepare for that, here are some key questions and answers they need to consider.

When employee groups find Yammer productive, and its use grows organically, at some point the business has to acknowledge its presence and get a handle on it. Ignoring it eats up network resources unpredictably and poses potential security risks.

Doesn't Microsoft already have products that perform the same functions as Yammer?

There is some overlap, particularly with SharePoint, but Yammer's familiar social-networking interface is more extensive and attractive to many users. Proof: Yammer customers are already willing to pay a premium for its Microsoft SharePoint and Microsoft Dynamics integrations.

What do Yammer services cost?

There is a free version, but a group service with more functionality costs $79 per group per month. A customizable version with administrative controls is $5 per person per month and the version that includes better security and SharePoint integration costs $15 per user per month.

Yammer also sells premium support, training and engineering services.

Who uses Yammer?

The company claims Ford, Deloitte, Intuit, DHL, Shell, eBay, Pitney Bowes and 7-Eleven among some big-name customers. The company also claims to have its products in use in 70% of Fortune 500 businesses.

Who are Yammer's competitors?

Competitors in the area of business social networking platforms include MangoApps and Jive, but larger competitors have made social networking acquisitions of their own. Cisco offers WebEx Social, IBM offers Connections, VMware has SocialCast, Salesforce has Chatter, Oracle has bought both Collective Intellect and Vitrue and Citrix has bought Podio, to name just some.

Does Yammer make a lot of money?

IDC estimates it made $22.3 million in 2011. With claims of adding 250,000 customers per month to its 5 million customer base, it could increase revenues nearly $10 million by this time next year if it converts just 10% of its new customers to its least expensive paying option. With links to Microsoft products and access to its sales infrastructure, it could grow even more rapidly.


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