Why is Yammer Worth $1.2B?

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You cannot underestimate the power of "working out loud" with social tools.

Over the last 48 hours there have been many words written about the rumored Microsoft acquisition of Yammer, but very little about just what Yammer is and why Microsoft would care.  In fact many have never heard of Yammer and wonder just where did this come from and why would Microsoft pay an Instagram price for this company with a potato like name.

The social revolution happening in the consumer space has also been happening within corporation.  It goes by the name of Enterprise 2.0, Social Business, or Social Enterprise.  Yammer is one of the early products who picked up on the twitter model of short messages posted to followers, but they keep it within the firewall of large corporations, creating a "walled garden" for private discussions within local and far flung offices of a company.  I was introduced to the product about 3 years ago when I was working for a global company with tens of thousands of employees.  About 1000 had already picked up on the idea and found great value in the self forming communities and open communications that Yammer enabled. 

Yammer claims to be used in 200,000 organizations and makes their entrance most often through a "freemium" approach.  The cloud based product can be enabled by any employee with a company email address.  Once enabled, the employee invites colleagues to join, tying the network together by the common email domain that is required to confirm your membership.  Often the network grows quickly outside of the watchful eye of the Information Technology department and before you know it, there is full scale, crowd driven collaboration taking place.  IT can't seem to understand why a product like this is needed, since they already offer email, IM and SharePoint collaboration sites.  But Yammer is special, it is a rebel product that can be installed, promoted, and maintained by Marketers or Sales people.  Yammer builds in viral hooks that encourage users to bring on more within the company using the email system.  Once they see a network picking up, Yammer's sales people begin to contact the heavy users and start the up-sell process to try to convert the service into a subscription at $5 to $15 per user per month. 

The irony is that relatively few ever convert.  A network of 10,000 users would cost $600k to $1.8mm per year at those prices.  The main advantage to a subscription is the ability to have better control, mainly in deleting employees that have left the company. It is not until IT and Legal get involved that anyone wants to even consider a pay model.  So, for the most part, the process continues and corporations in mass adopt this free service as a entry point into enterprise collaboration.

So, just what does Yammer do for a corporation?  Why would it be worth $1.2B as an acquisition?  Yammer provides an excellent selection of desktop and mobile clients that bring the network to the employee 24x7 on any device.  Just like Twitter, they offer a simple web interface, but also offer a desktop client and apps for every major mobile platform.  The security is simple and on a smartphone, the application is always on and always accessible, enabling quick and easy collaboration riding on top of the popular BYOD (Bring Your Own Device) wave.  

I used Yammer to monitor the flow of conversation within my company.  People would post ideas, suggestions, questions, or links to corporate intranet content.  Others would build upon those ideas, begin a conversation, or simply listen in to the conversation.  The conversations are mostly public within the company, but the tool gives the ability to create private groups where sensitive conversations can stay within a department or a team without being viewable by the entire corporation.  Once I asked the crowd where I could find the latest corporate PowerPoint template.  Within minutes someone I had never met responded with an intranet link to the answer.

You cannot underestimate the power of "working out loud" with social tools.  So many conversations get trapped in the one on one world of email and instant messaging.  With open sharing, new ideas emerge, experts are found, and teams are formed from the groundswell.  Serendipity happens when conversations become public and others are encouraged to listen and contribute their ideas, all within the safety of the company walls. 

Yammer is onto something big.  Microsoft recognizes that they need to make an acquisition to become relevant in this space and the deal is done.  All we need now is to get confirmation that this is indeed happening.  [update 6/25: It's official.  See the press release]

You can follow more emerging coverage on this handy Google Doc being composed by the crowd.

The Upside Down Enterprise Portal

TweetA new type of “citizen editor” is emerging, becoming a trusted source of curated content on the web.

I’m a curator of news. Like many people, I use twitter to gather the latest in technology opinions and developments. My particular interest is Social Business and Mobile gadgetry. Other people follow photography, sports, science or one of any variety of focused niche topics out on the web.

When we find something interesting, we retweet (RT) it to our Twitter followers or share it with our Facebook friends. Sometimes we send it as is, other times we add a commentary and pass it on. Most of the time, we are tweeting links (URLs) to other content. We are sending “pointers,” so to speak, to content that we find interesting on the web. Over time, we gather a following and become a valuable editor or curator of the news. Some turn it into a business like Mashable or Engadget. Others just do it as a hobby and use their “passion” to build relationships with like minded people or those wanting to learn more about that particular subject.

This model of curating information has turned the traditional media on its head. Gone are the days when a few powerful editors of the major print and television news outlets decide what the world should know. Do you remember the days before CNN when just three broadcast networks decided what to share with the public every night on the evening news? Times are certainly different now with many varying outlets to source our information. The real value comes when our “social network” shares what they feel is relevant. A new type of “citizen editor” is emerging, becoming a trusted source of curated content on the web.

On a typical day, I will monitor twitter feeds early and late in the day to catch up on the events, attitudes, and happenings. I have become efficient with the RT (retweet) as a means to share what I am learning. In fact this innate desire to share is driving the explosive growth of the social web.

Twitter has the “ReTweet”, Facebook has the “Like”, and Google just recently announced the “+1”. In fact if you look around, the ability to share is everywhere on the social web. Aging systems have the "email only" share choice, but modern software is being fitted with increasingly sophisticated share mechanisms that make it easy to share relevant content with your Facebook friends, Twitter followers, and a host of other groups.

On my iPad, applications like Zite, Pulse, and even Murdoch's The Daily all build in native functionality to share content that the reader finds interesting. YouTube even does it, but still ignores the "tweet this" option. It really is a new way to promote content and get the word out, taking advantage of the clout and credibility of friends or colleagues to share content that they find interesting within their social circle. Content goes "viral" quickly and takes on a life of its own when friends share it with friends.

So, where am I going with this? I had the "Aha!" moment recently as I was at the office reading news stories from the corporate intranet. I found a great story and wanted to share it with my corporate colleagues (aka followers). The familiar share button I always find on the public web was missing. Why don't we build this share capability into today’s enterprise portal? This new way of the emerging “citizen editor” can be applied to the corporate intranet as a means to share content relevant to the employee masses. It can be done much more effectively than the old Network News model when Corporate Communications comes up with slick stories and pushes it on all the employees.

This “secret sauce” of the modern intranet embraces the same concept. Abandon the old push model and embrace the “citizen editor” or “employee curator” concept as a means to share news and make stories and messages go viral in your company. Engagement goes up, good ideas spread, and information is quickly shared within a healthy collaborative culture.

Do you like the idea? Below is a straw man proposal to consider as you go through the next redesign of your corporate intranet.

Tomorrow's Social Intranet environment should have the following basic building blocks:

• Self Service Employee profile with IM presence
• Microblogging function (See Rawn Shah's Forbes post)
• Ability to follow / friend a colleague
• Corporate and user generated news feeds / articles
• Blogging platform
• Wiki platform (for collaborative authoring)

To make it truly social, add these advanced sharing (curation) abilities:

• Share ideas (tweets) internally with followers / colleagues / or the entire company
• Tweets should include any content on the intranet or internet
• Share button built into all content pages
• Metrics to track number of shares for each piece of content
• Most popular content is automatically featured on the portal home page

To make this content truly accessible it should be available on various form factors:

• Desktop / laptop access for all functions
• VPN remote access for all functions
• Mobile access on all popular platforms (Android, iOS, RIM, …) for limited functions such as news, microblogging, email, calendar, alerts
• Mobile access on employee’s personal devices

Finally along with the technology, there needs to be an equal or greater effort paid to the cultural change needed for a culture of collaboration, trust, authenticity, and transparency.

We are a few years into a revolution of content sharing and creation on the social web. It is only a matter of time before employees demand the same functionality within their corporate intranets. The smart communications officer will see the future being played out on the social web and begin to implement it within the enterprise today.

What do you think? Do you have examples where forward thinking enterprises are doing this already? Do you agree that this is the future? Or do you have another view. Please add your view in the comments below or in your tweets, shares and +1s.

None of Us is as Smart as All of Us

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It's a quote from "One Minute Manager", Ken Blanchard. It's also the perfect title for this short blog post.

I've been gathering tweet logs and blog posts from several conferences over the past year. I do a little work to set the stage and the crowd adds content. It's a great model.

If you have any interest in the latest thinking in Social Media / Social Business / Enterprise 2.0 / Crowdsourcing and the like, I think you will find this wiki valuable. It provides full social web coverage for two Enterprise 2.o conferences, the European Enterprise 2.0 Summit, Defrag 2010, and a local Barcamp that I am very proud of helping to organize.

Check it out and make it better: E20 Wiki Workspace

(btw Look here if you want more witty crowdsourcing quotes.)