Yammer's Game Plan: CEO David Sacks Explains All
Sacks discusses the virtues of enterprise social networking in the cloud, the viral virtues of freemium, and how to kill an unsanctioned Yammer network.
Delivered as cloud software, Yammer claims 4 million users of its private social networks, which anyone can start for just the price of a company email address, with paid upgrades for those organizations who take the application seriously enough to want greater administrative control and features such as Active Directory synchronization. About 20 percent of those 4 million users are paid accounts, Sacks said, but the fact that you can get started for free allows Yammer networks to enjoy the same kind of explosive growth as consumer social networks. While other software products try to bring social interaction inside the enterprise, "to my knowledge, Yammer is the only one that has got this widespread voluntary adoption," according to Sacks.
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Sacks met with me for a wide-ranging interview about the philosophy and strategy behind Yammer on Presidents Day, when the firm's office in downtown San Francisco was mostly deserted. Among the topics of discussion were my recent critique of Yammer's freemium business model and what it means for organizations that wish to shut down an unsanctioned Yammer network. Sacks was also still grumbling about the jibe from Jive CEO Tony Zingale saying the Yammer approach is to "hand out a bunch of drugs at the schoolyard, and we'll come back and charge you for them later."
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The freemium model is valuable to employees because it allows them to have more say in the software they use at work, but it's also valuable to enterprises because they can "de-risk adoption" by seeing that people want to use the software before they pay for it, Sacks said. "You can not only try Yammer before you buy it, you can experience it--you're using the real thing."
Not every enterprise sees it that way, however. When individuals sign up for a free account, Yammer assigns them to a compartmentalized social network associated with their company email address (you can't get a free account using a consumer Hotmail or Gmail address) along with any other users from the same email domain. This creates what looks like a private social network for people from that organization--which can be a problem for organizations that don't want their people collaborating about business on a cloud service. Critics accuse Yammer of extorting companies into becoming paying customers, just to gain administrative control.
I discovered a few weeks ago that the Yammer's initial response to an organization wanting to shut down a Yammer social network is to say the organization has no power to do so. In the absence of a contract with that organization, Yammer's position is that the data is owned by the users who registered with the service. It turns out there is another, more enterprise-friendly answer you can get if you push harder. "You can send us a DMCA takedown notice, just like you would to take down a YouTube video," Sacks said.
That's a reference to the Digital Millennium Copyright Act, which provides a basis for asserting copyright over communications employees posted to the service without authorization. Sacks insisted Yammer's concern is with honoring the promise it makes to individual users when they sign up for an account. Although they are told their accounts will be subject to the control of whoever owns their Internet domain, should that organization become a paying customer, they should not have their accounts deleted lightly, he said. On the other hand, an organization that has its lawyers draft the DMCA paperwork is taking serious, official action and providing Yammer with the legal justification it needs to close the unpaid accounts, he said. If you insist on closing a rogue social network, Yammer will "walk you through that process," Sacks said.