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4/12/2011
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Yammer CEO Challenges Copycats, Promotes Enterprise Social Networking

David Sachs, a former PayPal executive, uses consumer Web app smarts and grassroots marketing tactics to take on rivals like Salesforce.com's Chatter, Socialtext, and IBM and its Lotus division.

Businesses Take Action With Twitter
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Slideshow: Businesses Take Action With Twitter
Yammer CEO David Sachs sounds a bit grumpy talking about the "copycats" trying to duplicate his firm's enterprise social networking service, which he insists is way ahead of all imitators.

Yammer is a corporate Twitter, allowing companies to encourage microblogging-style message sharing among coworkers within a company domain rather than with friends around the world. The product goes deeper than tweets, with directory integration and file sharing capabilities for corporate customers. Still, at least on the surface, that doesn't sound like a difficult technology to duplicate, and other companies are certainly trying.

In the past few months, Salesforce.com has introduced Chatter.com, the standalone service of the microblogging application it originally created for conversations among sales and support teams, and Socialtext has appealed to Yammer users with an aggressive pricing and migration package. Companies with decades of experience in enterprise collaboration technology, such as IBM and its Lotus division, have added status updates as another means of stimulating conversations within a company.

One recent MIT Technology Review profile was titled Yammer Gets Workers Hooked First, Then Woos Bosses. That's a reference to letting anyone at a company create a Yammer account and start using the service to collaborate with co-workers who have email addresses at the same domain--often leaving company leaders to discover after the fact that the system is turning into a de facto standard. By then, Yammer hopes the system will have proven so useful in this ad hoc fashion that corporate customers will sign up in order to assert more control over the system and get a higher level of integration. On the other hand, competitors who stick to a more traditional sales model are quick to emphasize how much better they cater to chief information officers who want to remain in control of their technology.

We began our interview with Sachs with a discussion of the sales model and what it means for Yammer and the enterprise.

Carr: So, you hook the users and bring the bosses in later?

Sachs: A lot of bosses use Yammer, too--on the free and the paid plan. The real point is you can try it before you buy it. I just think that's so important. The first step in the evolution of enterprise software moving applications to the cloud is you get rid of a lot of installation, maintenance, and compatibility issues. Once the applications are there, and they don't require all this complex installation, you might as well just let people try it. The alternative to that is you're relying on the claims of salespeople. People want to be able to try it first--that's certainly how it works in the consumer space.

Carr: Do you come out of the enterprise software world?

Sachs: I was the original COO of PayPal, from 1999 up until 2002 when we sold it to eBay. Then I created another company called Geni, which has a collaborative application for doing genealogy. So my background is more in the consumer Internet, and that's true of some of the other co-founders. We have brought a lot of that thinking into the enterprise.

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