Microsoft: Yammer Generates Big Business After Buy

No post-acquisition blues for Yammer. Microsoft reports that the enterprise social networking platform had a record-setting year in 2012.

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Not only is Yammer doing well under Microsoft's stewardship, it's thriving, the software giant said Feb. 20.

Microsoft released statistics to highlight how the enterprise social network fared in 2012, a year that brought a major change to San Francisco-based Yammer. In June, following several days of rumors, Microsoft made headlines when it announced that it was acquiring Yammer in a deal valued at $1.2 billion.

Yammer remains a stand-alone product, but Microsoft is busy integrating it other business offerings, including Office 365 and Dynamics for ERP and CRM. Yammer made its first showing as a Microsoft unit during its inaugural YamJam user conference in October.

Microsoft CEO Steve Ballmer noted at the time that Yammer's growth to 5 million users was attributed to both viral growth and a vote of confidence from corporate IT departments. That momentum is accelerating post-acquisition, Microsoft revealed Feb. 20.

In a statement, Yammer co-founder and Microsoft Office corporate vice president David Sacks noted that business has picked up since his firm was acquired. "Yammer experienced banner growth in 2012 and grew particularly fast in the fourth quarter. Our momentum is definitely accelerating following the Microsoft acquisition," he said.

The numbers back him up.

According to Microsoft's figures, Yammer surpassed 7 million registered users last year. The company also reported that for the full year ending Jan. 31, 2013, the number of paying customers increased 165 percent and sales nearly tripled from the same year-ago period.

Yammer's fourth-quarter sales were especially robust. The company said that it added 290 new paying customers and that sales quadrupled year-over-year. During that quarter, Yammer was able to nab some high-profile customers, including GlaxoSmithKline, Rio Tinto, T.G.I. Friday's, Trek Bicycle and Woolworths Ltd.

To illustrate the platform's growing popularity in mainstream enterprises, Microsoft boasted that "nine of the largest retailers in the world" and "four of the largest financial services companies in the world" are among Yammer's growing number of paying customers.

According to Sacks, this is all evidence that enterprise social networking is not a passing fad.

"The power of the 'freemium' model and the validation that Microsoft brings to Enterprise Social Networking is helping drive mainstream adoption among leading organizations. Enterprise Social Networking is becoming the cornerstone of workplace collaboration for its ability to empower people and drive employee engagement, team collaboration and business agility," stated Sacks.

As for the future, Adam Pisoni, Yammer co-founder and general manager of engineering for Microsoft Office, hinted that Yammer is poised to become more flexible and mobile-friendly as the platform integrates more of Microsoft's cloud-based productivity and collaboration offerings. "The development teams are coming together quickly, and we are leveraging existing technologies, such as SkyDrive Pro and Office Web Apps, to swiftly deliver greater value for customers," said Pisoni.

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...