Microsoft Acquires Yammer; Proving Social HR Tech is Still Sought After

Parsing Through What Microsoft's Acquisition of Yammer Really Means

"If a tree falls in a forest and no one is around to hear it, does it make a sound?" At first blush, this oft-cited riddle from Twiss and Mann's 1910 book "Physics" may seem to be out of place in a blog about HR technology, but after seeing the dearth of coverage in the HR industry over Microsoft's latest $1.2B Yammer acquisition, it felt exceedingly appropriate to start off with. I mean come on, social HR tech has been a hot topic for quite some time within the HCM blogosphere; so why the silence? After all, the IT and Customer Relationship Management (CRM) industries have jumped on the announcement—sprouting countless articles about what this latest buy means to broader circles. Not only that, but IDC analysis pegs the market worth for business social networking at $4.5B by 2016, a clear indication that there's still a lot of ground to gain in the social technology realm—especially in the employee productivity application market where Yammer sits.

Granted, Yammer has only carved out a small part of that social market (roughly 3% compared with leaders IBM's and Jive's respective 14% and 8.5%), but the company can lay claim to a 5 million user-strong base (and a usage rate of 85% of the Fortune 500)—providing the solution with a bit more credence than some small-time social technology up-start. Nevertheless, the HR software's industry silence begs the question of whether this acquisition even matters.

What does the Yammer Acquisition Mean for Microsoft Functionality?

Much like the long list of Yammer competitors (i.e. IBM, Jive, Mzinga, Telligent, etc.), the functionality that Microsoft gains with this sizeable purchase is the Facebook-esque (only private) capability for internal collaboration, community creation, profile/status posting and updates, and (most importantly) the ability to find and share information and expertise.

Although at this point Yammer is expected to remain a standalone point solution (in much the same vein as Dynamics and 365), the true benefit of this acquisition will rest in being tightly integrated with Sharepoint. Indeed, as IDC's Michael Fauscette puts it, "there is no doubt that Microsoft will eventually meld Yammer with SharePoint". After all, according to Clarizen's CEO Avinoam Nowogrodski, Yammer should be able to handle the front-end of the collaboration process; "[incentivizing] conversations based on knowledge—with SharePoint offering the back end process and workflow".

Unfortunately, even though the capability is there, Microsoft has a steep road ahead given the fragmented nature of its other offerings. Whether you're talking about templates, documents, or simply MS Office applications, getting workers to collaborate using the same set of tools will be a major challenge to answer in order to make the Yammer buy successful. As it is with nearly all business-focused processes (especially HCM), the key to successfully leveraging social technologies is finding the balance between what can (and should) be unstructured and that which has to have structure.

Yammer is Just the Latest in a Long Line of Social Technology Acquisitions

While we're certainly singling out the Microsoft/Yammer acquisition here, the fact is that a number of social technology purchases have happened within the greater HR software industry radar as of late. For example, over the past few months Citrix bought Podio; Salesforce.com acquired Buddy Media; and Oracle purchased Vitrue—and those are just the collaboration-centric applications. Add in the Salesforce.com buy of Rypple or the Cornerstone OnDemand grab of Sonar6 and it's clear that the social tech aspect of human capital management is alive and well. What's curious though is that those applications that are focused on collaboration seem to go largely unnoticed outside of the CRM and broader IT spaces, even though the daily workforce impact is potentially greater. So what gives?

Well, for one thing, the latest research from Deloitte highlights a disparity between the perception of a company's top management and that of its employees. For instance, when queried about social media's organizational culture affect, 45% of management viewed the impact to be positive; whereas only 21% of employees saw those same social technologies as helping to "build and maintain workplace culture". Equally interesting though is Ventana Research's most recent finding that fully 39% of organizations "explicitly deny people the opportunity to interact using [these collaborative technologies]"—a troubling albeit unsurprising statistic given the fact that nearly 50% of business see HR as the funding source for Enterprise 2.0 offerings. Clearly, while the social technology market may be growing, the understanding (and adoption) of these applications is far from universal.

Concluding Thoughts on Microsoft's Yammer Buy

On some level I suppose this latest news (perhaps like the starting riddle suggests) failed to resonate with the broader HR technology industry. Indeed, aside from the potential impending business losses for NewsGator, with the increasing amount of noise that talent management applications, HCM analytics, mobile HR, and the cloud are making, it's not beyond the realm of possibility that analysts and customers alike saw Microsoft's buy as solely a CRM-focused purchase and outside of the scope of warranted attention. For my money though, the question about this latest lack of coverage about Microsoft and Yammer isn't as easily answered by indicating that the news didn't make a sound. Rather, it would seem that the true nature of this issue is that when it comes to collaboration-based applications, key people aren't listening.

  Categories: Social HR Software

  Tags: Microsoft, Yammer, Social HCM

  Permalink: www.hrlab.com/microsoft-yammer-acquisition.php

 Author: Micah Fairchild

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