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March 05 2010

Yammer: Will Viral Work in the Enterprise?

I work for a very large company and at some point or another someone started a Yammer account based on our email domain. Starting on whatever day that was, Yammer commenced its viral expansion and its spread has really been quite impressive and rapid. Last time I looked we were approaching 3000 users.

The usage demonstrates all the free-scaling behaviors you'd expect though, so not everyone is yammering away. Still both the growth and the impact have been impressive. We are developing a nice network of the kind of weak connections that tend to "small world" a big enterprise like ours. It's always difficult to quantify the benefits of "soft" collaboration but I'm really happy with what I see and I've personally enjoyed the interactions and my expanded network.

I think Yammer has done so well because it's a really good product with well thought out features that make Twitter seem kinda retro. It has a nice slick interface, threaded conversations, and no pesky 140 char limit (which is countered by a "return key = submit" that inhibits multi-paragraph posts). They are also working to create the kinds of features that enterprises need to feel comfy: an api that includes directory integration, an Outlook module and etc.

However, despite all that, I'm bummed to say I don't think they are going to make it.

The question of data privacy and ownership comes up over and over in our Yammer discussions. The last time it came up the thread ran for nearly 100 responses. Even though the typical post is something like "Who is using Grails?" or "Is the X application slow for everyone today or just for me?" data privacy is simply one of the biggest concerns going for a lot of companies these days. The mere suggestion that our data isn't under our control is a big deal.

This point was demonstrated to me in a personal and compelling way during my first week on Yammer. I mentioned a client meeting so that I could share a few tidbits with colleagues. Hours later I was surprised and dismayed when a Google search revealed that my comments had been re-posted to the friendfeed of someone I didn't even know. Someone on our network had written a quick and dirty app to follow his Yammer RSS feed and re-post everything to friendfeed. Then for good measure he followed everyone in our network. When I "politely suggested" he take it down he equally politely explained to me that I just didn't get Web 2.0.

Despite that kind of hiccup, I don't think data privacy is the death knell. After all, no one has told us to stop using it yet. The real problem is that Yammer thinks viral works the same way in the enterprise that it works on the web. It doesn't.

Yammer, by being free and viral, is demonstrating in that soft benefit kind of way to lots of enterprises like ours that networks of weak connections and "ambient collaboration" are useful. Usage is creating a pool of users and even executives that "get it." But they are playing their cards too early and are probably going end up as little more than a contribution to someone else's cost of sales.

Recently a thread started with "does anyone know how to remove people from Yammer that left the company?" Well, it turns out that's an admin function and only available to paying customers.

While we have grown rapidly and virally, the "admin issue" is coming to a head with only about 1% of the company holding an account and probably more like .1% actively posting. There is no way this is going to be a level of usage that an enterprise like ours sees as lock-in. And it won't for anyone else's either.

If the average company has an attrition rate of 10% it means that EVERY company that adopts Yammer virally is going to start to have this conversation well before adoption has locked them in. Every company will face the problem of removing ex-employees by the time they reach relatively low penetration rates. If it's a 25 person shop it may be easier to just pay the $3/employee per month than worry about it, but for any reasonably sized enterprise this is going to force an off-budget-cycle decision that involves real dollars before adoption has locked them in.

The other problem with viral adoption as a strategy is this: I may love using Yammer, but I'm not Yammer's customer, our IT department is. And they already have SharePoint. What Yammer doesn't understand, and what Microsoft has known for years, is that IT makes these decisions, not the users.

While Yammer is going viral with users out at the edge, Microsoft perfected its S1P1 virus to attack the very core of the IT enterprise. So, when it comes to enterprise microblogging, The Microsoft Office SharePoint Server (MOSS) and its various add ons may be mediocrity in code form, but it's already there. And being there counts.

January 06 2010

Four short links: 6 January 2010

  1. How Visa, Using Card Fees, Dominates a Market -- (NY Times) two interesting lessons here. First, that incentives to create a good system are easily broken when three parties are involved (here Visa sets the fees that merchants pay banks, so it's in Visa's interest to raise those fees as high as possible to encourage more banks to offer Visa cards). Second, that that value-based charging ("regardless of our costs, we'll charge as much as we can without bankrupting or driving away all of you") sounds great when you're doing the charging but isn't so appealing when you're on the paying end. Visa justifies its fees not on the grounds of cost to provide the service, but rather by claiming that their service makes everything more convenient and so people shop more.
  2. Doing It Wrong (Tim Bray) -- What I’m writing here is the single most important take-away from my Sun years, and it fits in a sentence: The community of developers whose work you see on the Web, who probably don’t know what ADO or UML or JPA even stand for, deploy better systems at less cost in less time at lower risk than we see in the Enterprise. This is true even when you factor in the greater flexibility and velocity of startups. I've been working with a Big Company and can only agree with this: The point is that that kind of thing simply cannot be built if you start with large formal specifications and fixed-price contracts and change-control procedures and so on. So if your enterprise wants the sort of outcomes we’re seeing on the Web (and a lot more should), you’re going to have to adopt some of the cultures and technologies that got them built.
  3. Analytics X Prize -- The Analytics X Prize is an ongoing contest to apply analytics, modeling, and statistics to solve the social problems that affect our cities. It combines the fields of statistics, mathematics, and social science to understand the root causes of dysfunction in our neighborhoods. Understanding these relationships and discovering the most highly correlated variables allows us to deploy our limited resources more effectively and target the variables that will have the greatest positive impact on improvement. The first contest is to predict homocides in Philadelphia. (via mikeloukides on Twitter)
  4. Protecting Cloud Secrets with Grendel (Wesabe blog) -- new open source package that implements Wesabe's policies for safe handling of customer data. It uses OpenPGP to store data, and offers access to the encrypted data via an internal (behind-the-firewall) REST service. The data can only be decrypted with the user's password. Hopefully the first of many standard tools and practices for respecting privacy.

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