Why Yammer Said Yes to Microsoft: Q&A with Co-founder David Sacks

8/30/12Follow @wroush

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we think there are a lot of exciting integration opportunities. The combination of those two things got us excited about getting off the independent track and partnering with them.

When you think about scale and reach, Microsoft has trusted relationships with virtually every large enterprise, and I think their field sales organization has something like 40,000 people in it. There are tremendous resources there to take us to the next level of distribution, much more quickly than we could on our own.

On the product side, there are great opportunities with Office, and Office 365 specifically, as well as SharePoint, Dynamics, and Skype. We already had a Dynamics interface and a SharePoint integration but I think we can do much more interesting things once we are able to work together more natively.

As I’ve said before, one way I look at it is, social networks need killer apps. We could try to build all of our own apps, but Microsoft has the number one office productivity app with Office, the number one content management system with SharePoint, the number one Web communications tool with Skype, the number one e-mail application with Outlook. The opportunity to integrate with these killer apps will, we think, make our social network much more useful.

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X: Are you saying that by joining Microsoft, you can get the lion’s share of the necessary integrations done faster?

DS: I don’t know about the lion’s share, but clearly where Yammer is going more generally is that we want to integrate with all of your enterprise apps.

I think there have been a few phases to this idea of enterprise social networking. In the first phase, when we launched it, everyone hated the idea. If you look at the analysts’ reports, they were all extremely dismissive. Everyone said, ‘How can social networking possibly be productive for business purposes?’ Our view on it was always that social networking is a communications tool like the telephone. Yes, people use it for personal communication, but you can also use it to call a business colleague.

Eventually, the market caught up with us, and now the analysts provide whole reports on the enterprise social networking space, and we are kind of institutionalized. Now the risk is that all the enterprise apps out there are trying to build half-baked social networks into their apps. With a lot of other players in the market, they are trying to do social, but they are not doing it very well.

X: You’re talking about Salesforce.com’s Chatter, for example.

DS: Well, I don’t want to be too harsh on them. But what’s clearly bad for customers is if you have a dozen different social networks in your company. Social networking has become so accepted that we are in danger of sprawl. So now what Yammer is doing is focusing on this problem of social networking sprawl. We have YamJam coming up on October 28, and you will see some announcements there. We want to be the tool that integrates with all of these apps, to solve the problem of having too many social networks in a company.

X: That’s a push you had begun well before the Microsoft acquisition.

DS: Right, so what Microsoft will enable us to do is accelerate this type of integration with some of these key apps that already exist in the enterprise. Once people see what we are able to do with Microsoft, I think it will be a model for what other companies can do with Yammer as well. We haven’t announced exactly how the integrations are going to work, but what I can tell you is that we are going to do them in a way that is sufficiently general so that the opportunity is there for other applications as well. We want Yammer to be a platform. We are very committed to that.

X: Is Microsoft also committed to that? The company isn’t famous for its willingness to cooperate with competitors.

DS: I think Microsoft understands the power of standards. They understand the importance of making their products programmable. If you look at SharePoint, which is one of the groups we are working most closely with, it’s incredibly customizable. It’s almost like a development language. There is a whole ecosystem of SharePoint developers who are able to use it as a toolkit to build a vast array of different sites. So I think Microsoft clearly understands the value of APIs and standards and programmable interfaces.

X: Microsoft has been getting a lot of bad press lately for management missteps over the last decade. Kurt Eichenwald’s piece in Vanity Fair this summer crystallized a lot of the complaints, with an emphasis on the destructive politics and management practices inside the company. As a former outsider, did you have any qualms about what it might be like to work inside Microsoft, and if so, what eased those qualms?

DS: It’s hard for me to speak to things that happened before I got here. What I would say is that now, it really feels like there is a tremendous amount happening in the company. It feels like a very innovative place right now. You’ve got Windows 8 coming out at the end of this year, which I think is the most ambitious upgrade to Windows ever; even the people who hate it say it’s incredibly ambitious. It’s all-in on touch. You’ve got Surface. You’ve got … Next Page »

Wade Roush is Chief Correspondent and Editor At Large at Xconomy. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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