The global 'Yammer Tour' (#Yamtour on Twitter) touched down in Australia this week, first in Sydney on Tuesday and today (Thursday) in Melbourne. If you weren't on board the Yammer train or part of the 'Yammerverse' already, then this was one almighty brush to try and sweep you up with, and it was an exceptionally well-produced event.
At Step Two Designs we're working regularly with companies looking at and using enterprise social network tools like Yammer and its competitors - Newsgator (SharePoint-oriented), Chatter (Salesforce), Tibbr, Jive and so on, while other tools such as Cisco Quad, and Social Text are also gaining traction.
The premise of all these tools is the same: they can be the catalyst for better employee engagement, expertise location, communication and collaboration; they have modern user interfaces; are easily deployed; regularly updated, and a few, like Yammer, are in the all conquering 'cloud'.
I approach sessions like the Yammer Tour with a healthy mix of enthusiasm and scepticism. The buzz around social, and Yammer in particular, is great. But the Kool Aid radar needs to be turned up to 11. Yammer itself has had more success than any other social software product in getting businesses onboard with the very idea of 'social'. Functionally too, it's a polished, well-designed product that's getting more capable all the time.
However, it's easy to get caught up in the hyperbole. There are some very serious, less shiny questions and statements that need addressing too.
Is Yammer a viable social tool for your business? Based on information provided this week at the event and our experience to date working with a lot of firms looking at and deploying social tools, here are six things you need to think about.
1. Yammer usage
Yammer has hit 4.2 million verified customers. Of these, around 20 percent are paying for it to some degree. This translates to ~840k paid users, a number that has been anecdotally confirmed elsewhere too.
The Yammer Tour crowd was wowed by 4.2 million users as a figure, and that 200k organisations globally are using Yammer. These figures are just figures, though. The above works out at 21 users per organisation. This is pretty meaningless data.
Another stat: Australia is also the 5th largest growing Yammer market, with 250k users across 15k organisations. This averages out to 16 users per organisation. Again, it's just data that doesn't really tell us much, especially when so many of those users and organisations are completely ungoverned and 'unofficial' from a corporate perspective.
2. Yammer's value as a business
Is the 840k paid users good? Is it a great conversion rate? It's tough to know. Yammer's cost per user for premium versions starts at a list price of $5 per user (per month). For the top-tier 'enterprise' licence, some quoted figures have been significantly higher than that.
Of further relevance here is Yammer's growth and revenue. Let's say 840k users are paying an average of $5 per user per month. That's $4.2m a month and growing (minimum). With $50m a year in revenue (again, minimum). Add in the fact that Yammer recently completed an $85m funding round at the beginning of March, (bringing total VC funding to $142m), suggests that the company is going places. To where we can only hypothesise at this point, but CEO David Sacks talks about a 'Facebook-sized opportunity'.
3. Yammer - the intranet replacement?
At the Yammer Tour, David Obrand, Yammer VP of Global Sales, stated that most intranets are not participatory, and that most existing enterprise software tools basically suck (my paraphrasing). And he's absolutely right. By comparison, Yammer has good functionality and a class leading, very familiar UI (taken almost pixel for pixel from Facebook). It exposes a lot of enterprise software products as the creaky, dated code pits that they are.
But is Yammer a viable intranet replacement? Yammer's team says, 'We want to be the place where work gets done. In time it will be'.
Whether you believe this really depends on your definition of intranet. If you perceive an intranet to be just about communication and social conversation, and the ability to co-author documents, then Yammer may be a viable intranet replacement tool. Yet it is missing a lot of pretty common CMS functionality, and is simply in the lightweight class of products compared to the best intranets out there.
You also have to ask, is it Yammer's destiny to become a mid-level, cloud-hosted CMS product, with social capabilities? If that's the case, what will happen first: Yammer adds all the CMS capabilities that organisations need, or CMS providers add a micro-messaging capability? Even with every necessary feature, you still have the cloud-hosted aspect, which remains a huge hurdle for many organisations.
Yammer's increasing integration and connections with other tools – SAP, Salesforce, SharePoint etc – is notable here (and awesome in many ways). But I don't see Yammer's (or any other social tool's) place in the enterprise as the single environment or unified interface, it's much more of an accompanying tool – the social layer in a composite system.
Replacing the intranet is an ambitious statement and a great strategy, but at this stage it's difficult to agree with it at anything but the most lightweight level. To top it off, ambitions to replace or 'kill' incumbent products rarely turn out to be realistic. This is why Lotus Notes still exists.
4. Yammer's longevity
The ambition to 'in time become the single place where work gets done' also leads to a further serious question; What does 'in time' mean for Yammer? If your organisation chooses to go 'all in' with this product, can you count on it to be around for long? One very possible direction is for Yammer to become the next Salesforce, SAP or Facebook. And that is also a fine strategy. Yet Yammer's considerable growth and substantial funding from VCs and existing investors can also be interpreted as screaming 'For sale'. At heart, it's a small, independent cloud service with a feature set that is both easily replicated and rapidly becoming commoditised. Among the main social software vendors, the race to dominate the enterprise social network world often seems like a race to create the most desirable product for one of the big vendors to buy.
There's zero problem with that as a strategy for building a company, but it may make customers hesitant in regards to a 3-5 year plan for enterprise technology. Will Yammer be around 'in time'? Possibly not. Is that a problem? In theory it's no different to almost every other software product not owned by one of the big software houses. Acquisitions and consolidation are par for the course in software, but not everyone has been happy with Oracle buying up the world, for example. Yammer's cloud-based existence may complicate things further in the acquisition scenario.
5. 'Voluntary adoption' for users, 'involuntary adoption' for organisations?
One of the biggest challenges we see for our clients is justifying the cost and business case for Yammer. Getting a true picture on licensing costs can lead to a big shock to organisations that, up to that point, have been enjoying their use of the free version.
'Voluntary adoption' is Yammer's slogan, and it tends to grab people by the neck and shake them hard, 'adoption' and 'How do we get people to use it" being a challenge for lots of intranet teams. Voluntary adoption is Yammer's biggest selling point though. For users, it's super easy to get involved – you just join up with your corporate email address and suddenly you're in the mix with any other person from your organisation that's done the same. The interface is just like Facebook, so it's familiar ("we don't' train people how to use Yammer"), and so there are few barriers to adoption – for users. In fact, it's so easy to sign up to Yammer that 'Should your organisation be considering a Yammer pilot?' is probably a moot question. Chances are, Yammer is already in your business and the scenario above is happening right at this moment whether IT or anyone else likes it or not.
For organisations this is interesting. For an organisation it's actually a case of 'involuntary adoption'. Until an organisation 'claims' its Yammer network – and to do so it has to pay a per user per month cost – the content 'belongs' to the individual user and Yammer has 100% control of it.
It seems terribly boring in the scheme of all the buzz of Yammer, but think about it: A third party, cloud-based software vendor is advocating that employees use their corporate email addresses for information sharing and collaborating – for work, ostensibly – on an external platform that the organisation in question has no control over, unless they pay a fairly substantial per user fee.
Is that even legal?
For many organisations we've spoken with, what began as a free lunch ends with a feeling not unlike extortion.
6. The cost of Yammer, and the pitch
Let's stick on the positive side of things, though. Let's say an organisation sees that interesting dialogue is happening on the unofficial, unclaimed corporate Yammer network and decides it does want to pay at least $5 a month, if only to get some control over it. How do you justify that cost? If you're a 6,000-employee organisation such as AMP (on the panel at the Yammer Tour in Sydney), with 4,000 Yammer users, that's $20k a month / $240k a year (for the full enterprise version you can expect to pay more than $5 a user).
Taken as a standalone monthly/annual cost that seems a lot, doesn't it? Most organisations have a per-desktop figure they use to keep track of costs and adding $5 or more, monthly, to that is indeed a fair increase. But Yammer's pitch here is interesting. Their pitch is that 'enterprise social networks are the future of work'. Just as when people had to write business cases for telephones on desks, or email accounts for each employee – now you look back and see that that was crazy. "Phones, email… this is the cost of doing business, you don't put ROI on having a phone system, or the cost of email". Most of that's true, though you do frequently hear people questioning how much email is costing them.
Yammer's pitch then, is that having Yammer costed at $20k a month is also the cost of doing business. "In the scheme of things it's not much at all" said Andy Hedges from Westfield, with, 'Benefits that are immeasurable'. As such, we're advised, 'Don't think about ROI with Yammer'.
The real issue here is that, really, 'Don't worry about ROI' is a great line. And it's true in some scenarios. For example, just the licensing for using Blackberries can easily be a lot more than $5 a month per user (try $30) before the voice and data plan, not to mention phone/unit cost. But really, an enterprise social network isn't like the phone. It's bit like email was I guess, vaguely, but software is quite an amazing space these days. To cut to the chase, spending $20k on Yammer every month is not the cost of doing business. Crucially, it's the cost of doing business if you decide to use Yammer. And that cost is something we're increasingly seeing organisations question when the fees start to look like $500k, or a $1million, per year, or more.
Again, the functionality of Yammer isn't conceptually complicated. Organisations have built similar platforms themselves, and there is a free, open source product that provides microblogging in any environment, integrated with your incumbent system. Put in the context of other products, Yammer starts to seem expensive.
Should you choose Yammer?
There's no doubt that enterprise social networks are a big part of the future of work. The promise of 'enterprise social' or internal social media has been obvious to many for years. Now there are some superb products that crystallise that opportunity and Yammer is at the forefront. Such easy-to-use, aesthetically pleasing social software interfaces, such as Yammer's, are also something to strive for in the enterprise environment.
The point is that there is choice out there, there are pros and cons to all products, and you should evaluate Yammer not in the context of other equipment like mobile phones, but versus other comparable social network tools.
It's wise to be informed, and to be strategic in your choices. Evaluate what's right for your business, choose your direction, and preferably do it before Yammer takes over your organisation, whether voluntarily or not.