The war of words in the social business sphere is definitely escalating into open trash talk.
Yammer was acquired just over a year ago by Microsoft for $1.2 billion, and has been closely integrated into Microsoft’s strategy for the social business. I have written quite a lot about that plan, and the reception of the marketplace has been quite favorable. In the recent quarterly results the enterprise side of Microsoft was the one bright spot:
The bright spot in what otherwise looks like a car wreck is the enterprise side of the company, which delivered 100 percent of the good news this quarter. As I wrote on Friday, “Office 365 . . . has risen to a $1.5 billion run rate, and the business division as a whole — including Office applications — rose 14 percent to $7.21 billion, although that included revenue from a deferred upgrade offer. Server and enterprise tools grew 9 percent as well.”
I think the integration of Yammer with Office 365, Sharepoint, and the other components of Microsoft’s enterprise offerings is a very credible competitor in the space, and their announced growth rate is impressive.
Perhaps that explains the comments of Tony Zingale of Jive, that declared Yammer “dead” at Fortune BrainstormTech in Aspen last week.
When asked about how he and his team at Jive felt at the time of the acquisition, Zingale responded:
On the first day we were celebrating because Microsoft’s the place innovation goes to die. However, if they get it right given their size and scale and their reach and their channels and the grip they have on the corporate integration technology organizations for workforce productivity tools… Yeah, I think it could be very challenging. So you’ve got to use the strength you have, which is move as fast as you can and innovate… And, at the same time, it validates even further the fact that there’s a real market here when a company of Yammer’s size and scale gets acquired for that multiple.
When asked whether Yammer had died in the 54 weeks since the buy, Zingale replied “It’s dead.”
Parsing Zingale’s words carefully leads to a different interpretation. Earlier, several of the panelists made the point that social software is booming and there are a long list of ten or more players that are all growing, including those represented on the panel, like Splunk, Tableau, and Jive. Zingale is clearly suggesting that Yammer’s innovation might be slowed by joining Microsoft, but he also makes it clear that Microsoft has a long list of capabilities that could lead to Yammer remaining a serious competitor, but that, in his mind, they are “dead”, which I interpret to mean that they have lost their edge.
One thing is clear, and that is we are going to hear more claims about this vendor or that vendor “dying” through acquisition by a larger company, because we are going to see a large shake out in this industry. In fact, I am surprised that Jive hasn’t been scooped, yet.