The Yammer Challenge

Four years after acquiring Yammer, Microsoft is still working on integrating it with Office 365. Amid a competitive market of rivals, will it become the default enterprise social network?

After Microsoft's $1.2 billion acquisition of Yammer four years ago, integrating the enterprise social networking service into Office 365 is still a work in progress. Yammer was arguably the hottest social networking platform -- just what was needed to give Microsoft products the kind of permanent, static messaging to complement Skype and tools with activity streams and newsfeeds lacking in Outlook, Office 365 and SharePoint. With a Facebook-style interface of facilitating discussions, Yammer would help Microsoft bring SharePoint into the newest era of enterprise collaboration and knowledge sharing.

The deal met both applause and apprehension, but it appears Microsoft is still getting its arms around Yammer. Though Microsoft has made some key progress in advancing Yammer's capabilities and bringing it to Office 365, the long path is the latest example showing that integration of an outside product is rarely a simple or speedy task. It took some time, but Microsoft has stated where it sees Yammer's main role, as a part of Office 365, although observers have debated to what extent. Integrating Yammer into Office 365 remains part of the roadmap, Microsoft insists. Yet when Microsoft in May discussed the future of SharePoint -- both on-premises and via Office 365 Yammer was barely mentioned, leading SharePoint and Office 365 experts to wonder what that might portent. The roadmap hasn't changed, according to Microsoft, noting the release of support for external groups in Yammer.

Yammer's Integration Challenges
The process of getting there has been challenging even for a behemoth like Microsoft. In January, Microsoft laid off the members of the community-building customer success managers (CSMs), who helped turn collaboration into a success at firms using Yammer. This came on the heels of other moves that upset the Yammer community.

A month later, the standalone Yammer Customer Network (YCN) was shut down in favor of an Office 365-focused community. This has caused more "grumbling" in the Yammer community, but it shouldn't be unexpected because that was Microsoft's strategy.

Reinventing productivity is one of Microsoft CEO Satya Nadella's key imperatives for the company. "In the Office 365 and sub-products, that's what we're all about," says Jon Orton, director of Office product marketing at Microsoft. "When you think of productivity, it's far beyond individual productivity. Teams, groups, networks are playing a role in how we get things done today. So we're focused on delivering tools to make it easy for teams to come together and collaborate, as well as focus on making things more transparent and more discoverable in organizations."

Since absorbing Yammer, Microsoft's efforts have been as much behind the scenes as up front with the Office 365 inteĀ­gration. In addition to the most recent addition of support for external groups in late April, Microsoft completed foundational efforts to bring Yammer fully into Office 365, which has included moving Yammer into Microsoft-managed datacenters and integrating identity work with Active Directory.

Because Microsoft has been working on the back-end plumbing of Yammer for some time, which isn't visible to users, it gave the impression that the company wasn't putting much work into it. Now that it has much of the back-end done, the company plans to deliver more user-facing features, such as groups support.

Rob Helm, managing vice president for research at Directions on Microsoft, believes the shift from a standalone product to making Yammer primarily an Office 365 function reflects the larger future for Yammer, where it stops being a standalone service and becomes a feature of Office 365.

"I think eventually it will be the group discussion feature of Office 365 and integrated with other Office 365 features like the directory and Outlook groups feature," Helm says.

"We're focused on delivering tools to make it easy for teams to come together and collaborate, as well as focus on making things more transparent and more discoverable in organizations."

Jon Orton, Microsoft Director of Office Product Marketing

The Bigger Change
Microsoft paid a lot for a small company, a defining characteristic of the big-spending years of former CEO Steve Ballmer. Whatever happens to Yammer, Helm believes Microsoft got its money's worth because it gained more than just a product; it gained a company that has transformed the once-king of on-premises software, both desktop and server, into a more cloud-capable developer. "I think what Microsoft paid $1.2 billion for was a bunch of people who knew how to build collaborative apps in the cloud," Helm says. "They knew how to collect information on how people used those apps and feed it back into the development process, so they could respond to what they were seeing in the field and test it."

Helm also believes Yammer's engineers helped train Microsoft in the cadence of cloud development, and that has spread beyond the Office 365 group and beyond. "Talent and particularly knowing how to develop for the cloud and processes involved was a big part of the price," Helm says.

[Click on image for larger view.] Yammer is part of Office 365, but it's not yet integrated into the service.

"The Yammer team has definitely helped us in this -- learning how the cloud element and delivery works," Orton says. "The culture and DNA of the Yammer team have definitely spread throughout the Office 365 team. Culture is the right word because it's habits and ways of doing things."

Yammer's strength in data reporting and analysis helped the Office 365 product team learn a lot about things such as telemetry and analysis. The cadence at which they ship updates to the product are another part of the culture, according to Microsoft's Orton, and all center around the reality of the cloud element, the way it's done and the way to do it successfully.

This change has permeated other parts of the company, most notably the development of Windows 10, which has become Microsoft's first client-side "cloud OS," because updates are being delivered on a more continuous basis. This is a change from the old method of patching bugs monthly, then shipping a service pack that adds in a few new features a year later. Windows 10 has been in a constant state of update, with new features appearing regularly and behaving much like a cloud-based product.

"When history looks back on the Microsoft-Yammer story, the acquisition may ultimately be viewed as one of the best in Microsoft's history because of the way Yammer's development culture and focus on product telemetry has so dramatically impacted the development culture in Redmond," says Christian Buckley, a Microsoft MVP and chief marketing officer of Beezy Inc., an enterprise collaboration solution that sits on top of SharePoint and Office 365. Buckley, who also is a blogger for, worked at Microsoft on the SharePoint team about a decade ago. "It's a very different company than the one I left back in 2009, and it's exciting to see this change," Buckley says.

In general, Microsoft is trying to shift its business over to the cloud and shift development cycles to make even more use of data coming back from the field than the company was doing, according to Helm. "Almost all Microsoft product development is moving to that faster rhythm," he says. "With Office 365, Microsoft is hoping to deliver new features three times a year instead of once every three years," he says.

SharePoint Left Out
If there is a complaint to be had about Yammer at this stage, it's the lack of integration with SharePoint. While it's a seamless part of the Office 365 story, Buckley describes it as a "bolt-on news feed" for SharePoint, which is good for most people, but lacks governance, security concerns, and management oversight for organizations that are SharePoint-centric and want more native social features within the platform.

"I think [it] had a strategy for enterprise social, but [Microsoft] abandoned that strategy when [it] acquired Yammer, focusing on [its] acquisition and its millions of users," Buckley says. "The problem is that in the four-plus years since [Microsoft] did the acquisition, [the company hasn't] done what the community and what customers expected [it] to do as far as integration. There were big technical issues to solve, and [it has] certainly made progress, such as being able to provision a single user profile across multiple Office 365 workloads, including Yammer. That's great progress. But for SharePoint customers specifically, there is a gap. And, honestly, [Microsoft hasn't] done a good job of communicating about that gap."

Tim Kenney, vice president of client success with Handshake Software, a small to midsize enterprise (SME) and provider of SharePoint-based solutions for law firms, echoes Buckley's sentiment on SharePoint integration. The problem, he says, is that because Yammer isn't fully integrated into SharePoint; it's another place to go to, another Web site to bookmark, and that makes things difficult for users.

Social networking isn't really embraced in law firms. It's not a good idea to discuss cases, especially on a social network where people can see it who should not. From a governance perspective, they frown upon it. But the other staff really like the idea of the social, Kenney says.

"Frankly, I had low expectations of this and have gotten nothing but positive results out of it, so that makes me hopeful for the next step to make it part of something else like SharePoint. It's very easy because of the structure of Office 365 to send out invites and joint a network," he says. "So that was a low threshold clients were able to meet."

Despite the fact Yammer is a Microsoft-centric product, non-Microsoft users report Yammer still works perfectly fine with their systems. Parsely Inc. (aka, the developer of analytics software for digital publishers, uses Yammer across the company despite being a Google Docs shop. "Yammer is meant to keep us all in the loop on what we've accomplished during the day/week, and to make communication seamless across our distributed team," says Allie VanNest, a company spokesperson.

The company's CTO Andrew Montalenti recently wrote a blog post praising Yammer for its ability to help the team communicate short status updates every day. They use the #standup hash tag at the start of the day to describe goals for that day, and a #sitdown hash tag at the end of the day to assess how they did.

"Our team does this practice religiously, and it completely eliminates the need for ‘status update' meetings present in so many (in my opinion, dysfunctional) organizations," Montalenti wrote. "You can simply review the Yammer stream around 11 a.m. and you know exactly what everyone is working on. You can review it around 6-7 p.m. (or the next day) and you know exactly where everyone ended up. No meetings necessary.

"We've been using Yammer in this way for more than five years. I imagine, between the saved time from eliminated status update meetings and from our teams' lack of a daily commute, our product organization has saved many man-months of time. Adding manpower won't necessarily make a project more productive -- but removing useless time-wasters certainly will!"

Next Step
Helm admits he's not sure where Yammer goes beyond Office 365. "That is where Microsoft is doing all of its collaboration work," he says. "There is some Yammer support in Dynamics CRM now, but I expect [the company] to focus on Office 365. What Microsoft is building on top of groups is where the action is."

Kenney said he hopes for a better UI and navigation capabilities and, of course, improved integration with SharePoint and even Outlook. "My biggest goal would be to make it much easier to get into a Yammer conversation and see it," he says. "That's the main obstacle I have right now."

Going forward, with the foundational work behind it, the development team will focus more on delivery of end-user features to extend Yammer's core competency in terms of enabling open teamwork and collaboration and make it even more integrated with the rest of the tools that teams and individuals use to get things done, according to Microsoft's Orton.

"It's less how products innovate in their own little space and more how they drive creativity," Orton says. "Users interacting with these products don't care where the boundaries of Exchange meet up with SharePoint and OneDrive and Skype. They want to come together in seamless ways without a lot of friction."


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