Microsoft Admits SharePoint Weaknesses in Yammer Acquisition

NEWS ANALYSIS: SharePoint, though a popular tool, inherently lacked some key capabilities--real-time engagement is a main one--that workers are accustomed to using today, and the company knew it had to make a move.

By acquiring Yammer June 25, Microsoft revealed two important things: first, it has finally awakened to adding a tried-and-true social network as a major focus of its catalog; and second, SharePoint isn't the socially aware work collaboration offering it had once purported it to be.

For the last five years, Microsoft has been selling its SharePoint document-sharing application as a total tool for group work, and it has been a large success in many ways. In fact, it has been Microsoft's finest enterprise software development in recent years.


But as a pioneer in the sector, SharePoint inherently lacked some key capabilities--real-time engagement is a major one--that workers are accustomed to using today, and the company knew it had to made a move.

Installed Base of 200,000 in Four Years

So Microsoft made the decision to shell out $1.28 billion in cash to San Francisco-based Yammer, which has built an installed base of more than 200,000 customers, including 80 percent of Fortune 100 companies, in a relatively short period of time: less than four years.

For the record, Yammer is sort of an enterprise version of Twitter. Yammer founder and CEO David Sacks has described it this way: "The purpose is to allow co-workers to share status updates. You post updates on what you are working on. You can post news, links, ask questions and get answers for people in your company. You can see the most prolific people and the most followed people. It is a good way to discover who is the most influential in your company."

SharePoint has a lot of strengths as a content management system, but it certainly isn't a complete suite of capabilities.

"As a former member of the SharePoint product team, I'd be the last to say it's not a powerful tool. But its lack of features for social engagement has become a big liability," Oudi Antebi, a software developer and former Microsoft employee, wrote in his blog.

"At this point, I think Microsoft is acknowledging internally that the current version of SharePoint--as well as the next-generation 'Wave 15' version, which is around the corner--doesn€™t provide real social capabilities. The company is probably looking at Yammer as a way to close the gap."

How This Affects Microsoft's Overall Offering

What does the acquisition of this new-generation internal network do for Microsoft's overall offering and for the sector?

"No question that this news is a huge validation for the space," Tony Zingale, chairman and CEO of Jive Software, told eWEEK. "If you remember, the world's largest software supplier claimed for at least five years that the SharePoint content management system was, in fact, their social offering.

"They tried in '07, they tried in 2010; they were going to try in 2013 to put out SharePoint versions that were going to add social features. So by evidence of this announcement today, a $1.2 billion all-cash purchase, of a company that was nothing more than an activities stream and a 'freemium' supplier, it's pretty significant evidence that as the enterprise retools, that Microsoft was behind. And they needed to take action to integrate social capabilities--not only into SharePoint, but also Office 365, their CRM tool Dynamics, and a host of other things inside that Microsoft stack."

"From that standpoint, this is a big day, because this brings the need for social to front and center," Zingale said.

Yammer is the type of software network that can, and undoubtedly will, be integrated into much of what Microsoft does in the enterprise--and in the gaming business. It's not difficult to see that a private texting-like network like this can be used, not only within SharePoint, Office 365 and Dynamics, but in Xbox and in mobile networks like Sync (connected cars) and in smartphones.

Yammer Full-Featured Enough?

There will always be more than one side to any story, especially in the IT world, and there are still plenty of other perspectives on the Yammer deal.

One, for example, is that despite its strengths, Yammer still isn't full-featured enough.

"Microsoft's acquisition validates the critical nature of social connectivity as an enterprise capability. However, the activity stream supported by Yammer is only one slice of the value possible through enterprise collaboration," Moxie CEO Tom Kelly told eWEEK.

Moxie is a user-friendly social media application suite that offers both customer-facing and employee-facing software. Yes, it is a competitor to Yammer.

"If over the coming years Microsoft is able to build out a fuller capability, they and the companies that invest in this technology might see a return on their investment," Kelly said. What the market needs to know is that fuller capabilities are available now, and that companies that use them are already getting a functional and financial benefit from the full-featured enterprise collaboration software that Moxie delivers today."

So will Moxie be the next social networking application to be bought? We'll see. There are more than a few Tier 1 IT companies that also need this functionality, and they all know who they are.

Chris Preimesberger is Editor of Features and Analysis at eWEEK. Twitter: @editingwhiz

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 15 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...