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Microsoft joins the corporate chatter as companies go social

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You could say Microsoft has finally joined the Chatter. Or, more precisely, Yammer, which, by the way, means “to talk persistently or volubly and often loudly,” something Microsoft chief Steve Ballmer might best epitomise.

It’s probably moot to say social networking has come to the enterprise. That happened long ago. But what Microsoft’s $1.2 billion cash acquisition of the four-year-old Yammer, often called the Facebook for enterprises, brings is the lasting acknowledgement that software powerhouses absolutely need a social networking presence to survive.

As is the norm for the Redmond giant, it hasn’t been a pioneer in this sphere, and not even the first in the race to acquire enterprise-focused social networking firms.

That honour went to Salesforce.com, which in late 2009 acquired GroupSwim and created Chatter, a Yammer rival.

Oracle snared Vitrue, which is though more of a social marketing tool, and more recently, SAP has turned on a social networking tool after one its acquisitions, SuccessFactors, possessed such a feature.

It’s got people talking

Jive Software, a Yammer rival that went public last year, may think of itself as an early leader in this realm but Yammer’s got some great numbers. Its software is used by five million people at 200,000 companies, nearly 85% of the Fortune 500 companies.

What’s more, reports suggest Yammer reached seven-figure revenues at least two years ago. It gives away a basic version for free, but charges customers for a variety of upgrades and controls, not to mention integrations with enterprise applications in order to create a truly secure, private social network within corporate networks. With Microsoft’s muscle, its prospects will likely zoom.

“The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love,” said Ballmer. “Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services.”

Microsoft plans to accelerate Yammer’s adoption alongside its own such as SharePoint, Office 365, Microsoft Dynamics and Skype.

Yammer will join the Microsoft Office Division, led by division President Kurt DelBene, and its team will continue to report to current CEO David Sacks.

“When we started Yammer four years ago, we set out to do something big,” Sacks said. “We had a vision for how social networking could change the way we work. Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we’ll need to scale and innovate.”

Ovum analyst Richard Edwards believes the Yammer acquisition would “sit neatly alongside Skype, the communication product that Microsoft acquired this time last year for $8.5 billion.”

Still, Edwards is not gung-ho about the Microsoft move.

“The acquisition of Yammer will undoubtedly have an opportunity impact at the commodity end of the enterprise social networking spectrum, but if Google and LinkedIn can address this aspect of the market with a compelling proposition then all is still to play for,” he said, suggesting the enterprise social networking game is still up for grabs.

From Microsoft’s point of view, it’s got in on the game, and, given Yammer’s strengths, might even get mighty play.

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