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1/7/2011
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Socialtext Takes Pricing Hammer To Yammer

Enterprise social networking vendor hopes to lure competitor's customers with aggressive migration offer.

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Socialtext on Thursday aggressively targeted Yammer customers with a free migration offer that lets businesses using its competitor's product move to Socialtext's enterprise collaboration social tools at a discount.

Businesses running the free version of Yammer with more than 100 users can move to Socialtext Signals for $4 per user per month, compared with Yammer Enterprise's cost of $5 per user per month. Yammer Enterprise paying customers with more than 100 users can use Socialtext's free migration service, and then receive Socialtext Signals and Socialtext People at no cost for one year if they buy the Socialtext social software platform for two years, according to the developer.

"After discovering a free instance of Yammer inside their company, many CIOs and IT directors have told us that they have to pay Yammer just to get control of their data and manage their users. This offering will help them transition microblogging to a more secure social software platform, where they own their data and control how many licensed users they'd like to pay for," said Eugene Lee, Socialtext CEO, in a statement.

Socialtext's move shows competitors are doing everything they can to take business away from Yammer, a company spokesperson told InternetNews.com.

"Our strategy is to continue innovating on our own product and creating value for our users. We believe that our strong growth and market momentum is reflective of the satisfaction among our customers," the spokesperson said.

The enterprise social networking space also includes Salesforce's Chatter, Socialcast, Jive, Bantam Live, and Success Factors' CubeTree. In 2011, enterprise social media software revenue is expected to reach $769.2 million, up 15.7% from 2010 revenue of $664 million, according to Gartner.

"The social software market is evolving in response to the demand for flexible environments in which participants can connect, create, share, and find people and information relevant to their work," said Tom Eid, research VP at Gartner, in a statement. "Social software improves the connectedness of workers, promotes collaboration, and helps capture informal knowledge. Social software excels in business contexts that leave room for individuals to interact informally, brainstorm, explore ideas, and encourage or challenge peers. Specific business value can be derived through customer intimacy, product/service excellence, operational effectiveness, and creating innovation."

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