Microsoft looks set to acquire Yammer

Microsoft, desperate to get a slice of "the next big thing", is reportedly spending $1.2billion on Yammer, a provider of social networking software (think Facebook and Twitter) for businesses and institutions.

Richard Edwards, principal analyst at Ovum considers why the big interest in enterprise social networking and what this acquisition could bring Microsoft.

"In stark contrast to collaboration activities that are conducted via corporate email systems and instant messaging tools, platforms such as Yammer make business conversations and activities highly visible (everyone with access to the system can see them), searchable, and discoverable. As one would expect from a business tool, access to information held within the network can be restricted and controlled so that proprietary or commercially sensitive information is not compromised, but the general goal of products like Yammer is to share insights, opinions, and updates among co-workers and network members.

"Many employees at the junior (and now senior) end of the workforce live aspects of their personal lives through Facebook and Twitter, so the idea of introducing similar kinds of tools into the workplace seems to make sense from a communication and collaboration point of view. It's not just Microsoft eyeing-up the opportunities afforded by the Facebook-led social paradigm shift. Established enterprise IT vendors, such as IBM, Oracle, Salesforce.com, and SAP, are all busy adding social capabilities to their business software solutions.

"Microsoft already has a product that touts social capabilities - SharePoint Server, but this was designed and built in the pre-Facebook, pre-cloud era. Launched in 2008, Yammer is a new breed of enterprise collaboration solution, designed from the ground-up to exploit social, mobile, and cloud technologies, and would sit neatly alongside Skype, the communication product that Microsoft acquired this time last year for $8.5billion.Organizations investing strategically in ESN software are likely to have products from Jive Software (NASDAQ:JIVE) and Telligent on their shortlists, but Microsoft's acquisition of Yammer will undoubtedly mean that this offering gets added to that list too."