Enterprise Mobility & Connected Devices Blog

Microsoft Acquires Yammer for $1.2B

This past Monday, Microsoft confirmed its $1.2 billion acquisition of four-year-old Yammer – a social networking company targeted at the B2B market. According to Microsoft, Yammer will join the Microsoft Office Division, but will continue to be overseen by Yammer’s CEO and co-founder David Sacks. In a press release, Microsoft stated:

"Yammer will continue to develop its standalone service and maintain its commitment to simplicity, innovation and cross-platform experiences. Moving forward, Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype."

Thus rather than integrating Yammer’s technological capabilities with Microsoft’s core competencies in desktop software, the company appears to envision Yammer’s services as an attractive “a la carte” option for enterprise customers.

Over the past five years, the Consumerization of IT (CoIT) has forcibly driven countless organizations to adopt more consumer-centric technologies, applications, and devices – for example the iPad, Facebook, and Twitter. The tech world has waited to see what Microsoft could bring to the table, and its strategy to capitalize on this trend. Last week saw Microsoft announce its new tablets (Windows 8 Pro and Windows RT) – the company is clearly looking to bridge enterprise-grade software and processing capabilities with a consumer-friendly interface. This acquisition of Yammer – at a considerable price point – symbolizes another attempt by Microsoft to adapt to today’s tech market. And yet, with its presence severely lacking in both the smartphone and tablet markets, and the PC market continuing to erode, this tech giant has a long road ahead to prove that it’s ready and able to tackle the future evolution of today’s technologies.

On the other hand, Yammer CEO David Sacks will likely prove a strong addition to the Microsoft team. Referring to the growing relevance of social networking to the enterprise, Yammer CEO David Sacks commented “Four years ago, we started paddling out to catch the wave that we’re riding today. With the backing of Microsoft, our aim is to massively accelerate our vision to change the way work gets done with software that is built for the enterprise and loved by users.” While vague in nature, this comment suggests that Sacks views this acquisition as the beginning – and not the end – for Yammer’s potential in bridging social networking technologies with the enterprise market. Will we see his goal come to fruition? Well, we see a slew of challenges ahead for Microsoft - one thing Microsoft does have in plenty is capital resources. Strategic employment of these resources and advancement of product strategy will be the true challenge.

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