Yammer is one of the leading feed-centric enterprise social networks, initially tagged a "Twitter for the enterprise" because it started with a simple news feed (albeit, not limited to 140 characters). Over time, Yammer has broadened its platform to include richer post types, feeds from applications as well as other users, and collaborative editing of web documents.
Yammer is offered exclusively as a cloud service, in contrast with competitors like Jive Software that try to balance the requirements of on premises software and cloud computing. VMWare's Socialcast has struck a different compromise, leading with the cloud but offering a virtual appliance for on premises deployment of the same software.
Yammer's David Sacks has always maintained that sticking to a pure cloud computing model is a prerequisite for success, allowing his developers to better keep pace with the advance of social technologies in the consumer world. With this acquisition, Microsoft seems to be ratifying that approach.
But will Microsoft be able to resist the siren song of those who want an on premises option? How many of the social software requirements of Microsoft's base will Yammer really address, if it remains available exclusively as a cloud service?