Enterprise social media partners who saw Microsoft as a natural ally and partner in their efforts to get their services running inside corporate offices must reassess their positions now that Microsoft is acquiring Yammer, says Rob Koplowitz, a Forrester Research analyst.
One example is Neudesic Pulse, an enterprise social media service that partners with Microsoft to integrate its platform with Microsoft products like SharePoint, Lync and Dynamics. For now, Neudesic Pulse is confident it will continue to grow in the social market even as Microsoft takes over Yammer. But Koplowitz sees Microsoft-Yammer having a significant impact on the partner ecosystem in enterprise social networking.
Its never good for the 800-pound gorilla to make a move like this, said Koplowitz. If Im a competitor, who do I align with outside of Microsoft because I cant think of that as a primary alliance any longer?
Koplowitz wrote a report in May (weeks before the $1.2 billion Yammer acquisition was announced June 25) comparing five companies in the enterprise social media space that have the strongest positions in the market, including Yammer and Neudesic. He narrowed his focus to firms that primarily build internal social networks for just corporate employees and perhaps business partners, but not consumers in the general public.
What the five companies all have in common is that they are developing social media technology that has the potential to become an industry standard, would support a range of enterprise applications and would be widely deployed across an enterprise rather than in specific business service areas like customer relationship management (CRM). In other words, itd be a fundamental application standard like email is a standard.
His analysis leaves out enterprise social media targeted at a specific area. A number of recent acquisitions by industry heavyweights have involved social media marketing, social media CRM, or social media and procurement.
The five services Koplowitz profiled are Yammer; Salesforce.coms Chatter; SocialCast, a 2011 acquisition by VMware; tibbr, the social media service of Tibco Software, which is nearly a $1 billion company; and Neudesic Pulse.
Neudesic is distinguished in the group for being the only privately held company in the bunch now that Yammer is in the process of being acquired by Microsoft, said Ramin Vosough, vice president for products at Neudesic, adding that it was built without venture capital funding and has been profitable for each of the last 10 years.
Does the Yammer Deal Validate Enterprise Social Media?
Neudesic is clearly a Microsoft shop, though Vosough says it integrates with non-Microsoft business applications, too. It also delivers Pulse in cloud and on-premise environments. Koplowitzs profile of Neudesic states that it integrates not just with Microsoft SharePoint and adds more features, but also with Lync for unified communications and with Microsoft Dynamics for CRM along with enterprise resource planning (ERP) in the cloud.
Vosough says he thinks the acquisition of Yammer by Microsoft will bring greater attention to all players in the enterprise social media market. He cited another Forrester report that put the size of the enterprise social media market at $6.4 billion by 2016. In addition, a survey showed that only 21 percent of business decision makers in firms of 100 employees or more frequently use collaboration software in their business groups or departments. Translation: Theres room for everybody to grow.
The news of this acquisition is going to educate more potential customers of the value of enterprise social networking, Vosough said.
But the dynamics change when a smaller companys partner becomes their competitor, said Koplowitz.
Now that Yammer will become part of Microsofts sales and marketing channels, the preference will be for Microsoft to push sales of Yammer, he said. The one situation in which a Microsoft person will offer something other than Yammer is if another product offers a feature the customer wants, but that Yammer doesnt offer.
Therell still be opportunities for partners to fill white space, but primarily, Microsoft sales people will have the incentive to sell Microsoft products, said Koplowitz. Microsoft as a sales channel changes dramatically for the partners.
Other companies profiled in the Forrester report include Salesforce.coms Chatter, which like Yammer, is a cloud-only provider. Salesforce made a name for itself as a CRM cloud platform provider, Koplowitz wrote, but has stepped up its promotion of Chatter as the next big growth opportunity for the company.
Of the tibbr offering from Tibco, the report noted that for a company with such a deep reputation for middleware, Tibco has managed to build a product with a very well-received interface. Tibbr has been deployed in enterprises that were not originally Tibco customers and that its social networking service has been integrated with non-Microsoft enterprise software such as Oracle and SAP.
SocialCast was started seven years ago, and one year ago it was acquired by VMware. As such, it emphasizes integration with VMware virtualization software as well as with the EMC product portfolio. EMC, a storage vendor, is a majority owner of VMware.