Microsoft insists that things are going well for Yammer since Microsoft bought it for $1.2 billion a year ago this week.
The user base has grown by 55% to 8 million and sales of paid networks are up by 200%, it says, though Microsoft won’t reveal the actual sales figure.
Microsoft has also made progress in integrating Yammer with Office 365, its suite of cloud based productivity apps.
But there’s one thing that hasn’t happened, at least not yet.
When the deal was announced, CEO Steve Ballmer talked a lot about Yammer’s “viral adoption model” and how Microsoft wanted to learn from it.
Yammer’s model lets employees starting using a free version of its product, and if they find it useful, talk their IT departments into paying for higher-end management features.
This is an example of what’s called the “consumerization of IT,” and it’s a new area for Microsoft.
“Yammer is a great adoption model and we want to pour more content into it,” Ballmer said last June in a conference call to announce the deal.
We asked Microsoft if it has adopted Yammer’s “freemium” model in other enterprise products.
It doesn’t look like it has.
Here’s what Adam Pisoni, Yammer co-founder and CTO, who’s now GM of engineering for Microsoft Office, told us in an email:
The way we think about freemium is different. At the time of the acquisition, Steve Ballmer coined the term “Yammerization,” which is about designing software for viral, voluntary adoption, but with enterprise-grade controls and reliability. As we think about what this means for Microsoft today, Yammer is becoming a freemium on-ramp to other Microsoft services. This is important because the buyer has changed in the enterprise, and, increasingly, employees aren’t just bringing their own mobile devices; they’re bringing their own services. Freemium allows those buyers to quickly get started with technology and prove value.
We asked Microsoft for specific examples of Yammer driving users to Microsoft services, and will update if we hear back.
We’re not saying it won’t happen. But it will be a tough transition for Microsoft.
One reason is that Microsoft sells its software to businesses in a very different way—usually through some kind of enterprise contract, where customers get a bunch of different products.
Another reason is that the business units inside Microsoft don’t always see eye-to-eye when it comes to change. For instance, Microsoft just launched a free version of Office for the iPhone. But it’s not a freemium “onramp” kind of product because you already have to have an Office 365 contract to get the free app.
That’s not going over well with users in part because its the opposite of the freemium model that Ballmer seemed so excited about when he plunked out $1.2 billion to get Yammer last year.
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