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A few thoughts on Yammer, a twitter-like for organizations

Posted Dec 19 2008 by Julien Le Nestour in  with 11 Comments

Yam­mer is an SAAS clone of Twit­ter, pro­vid­ing pri­vate net­works for groups and com­pa­nies. See this post for a good descrip­tion of the service.

When Yam­mer won the TC50, we wit­nessed two sequen­tial waves of reac­tions. The first was lauda­tory and praised a com­pany that found how to mon­e­tize a ser­vice like Twit­ter, where it had hith­erto failed. The sec­ond denounced its per­ni­cious busi­ness model. I fit squarely in this last camp. Here’s why:

Yam­mer lets any­one with a com­pany email address cre­ate a net­work open exclu­sively to the other per­sons with a valid email address on the same domain. Yam­mer adver­tises heav­ily this: any­one can open a secure and safe pri­vate net­work to ben­e­fit from twitter-like fea­tures inside your busi­ness. Oh, and it’s free, so why don’t you go ahead and ben­e­fit from all this great­ness ? Well, in fact you do and Yam­mer has had a good growth (but not quite like the impres­sive expec­ta­tions it had). But the twist gets you at this point and it hurts.

The twist here is in the busi­ness model. If your com­pany wants to man­age the net­work, then it has to pay. And the price is per user: the more users, the higher the price. So essen­tially, it is bait and wait: bait for the employ­ees to cre­ate a net­work and use it, wait for cor­po­rate IT to come, want to man­age it and spit out the cash.

But even when pay­ing, what you can get in terms of con­trol is very low. For the major­ity of large com­pa­nies, what you want is not a sys­tem based on email address, but one based on your SSO sys­tem. Mainly for one rea­son: you want to con­trol which ones of your alumni keep their access to the net­work, if any. Yam­mer doesn’t offer that, so you take a large risk by assum­ing you will man­u­ally do it. They also offer IP restric­tions, but that doesn’t solve the prob­lem either.

The only workaround offered is for employ­ees to sig­nal a for­mer employee when they spot them. Trust me, it won’t work. As wor­ry­ing is the con­tent own­er­ship issue which belongs to the user up until the point where the com­pany is pay­ing for it and claims the net­work. Even if cov­ered by the T&Cs, I imag­ine the poten­tial legal issues aris­ing from a change of own­er­ship with­out express con­sent of the users. What does this all mean?

The main con­se­quence for me is a loss of con­fi­dence in the “web 2.0″ appli­ca­tions as a whole, as they are viewed by a lot of peo­ple. Let me explain. It’s already dif­fi­cult to con­vince cor­po­ra­tions to use inno­v­a­tive appli­ca­tions from small com­pa­nies, espe­cially deliv­ered as a ser­vice. You com­bine the risk of deal­ing with small play­ers that can go bust in the short term and the risk of trust­ing them on their SAAS imple­men­ta­tion (yes, even with due dili­gence). We try to mit­i­gate that by explain­ing rep­u­ta­tion is a sig­nif­i­cant asset in this area as well, and com­pa­nies not play­ing by the rules have more to lose than to win.

But with busi­ness mod­els like Yam­mer emerg­ing, then the loss of con­fi­dence is not just for them, but for all the other appli­ca­tions as well. So this is bad for insid­ers within com­pa­nies try­ing to push for these appli­ca­tions, and bad for a whole bunch of other com­pa­nies. Because it raises the dif­fi­cul­ties to move them within the enter­prise. Bernard Lunn is not say­ing some­thing else in his review:

The rea­son Yam­mer was con­sid­ered bril­liant was that it had a “cun­ning rev­enue model”. Let me see if I’ve got this right. You use Yam­mer rather than Twit­ter to restrict the Fol­low­ers to your col­leagues. So you can dis­cuss com­pany secrets really securely. (That, by the way, was a joke!) You use your cor­po­rate email ID (Gmail, Yahoo etc not allowed). All that is free, so mas­sive viral adop­tion. Then com­pa­nies want to claim/control the con­ver­sa­tion. So they pay for all users on Yam­mer with a cor­po­rate email ID. Yep that is cun­ning all right. Other words come to mind as well.

What the bot­tom line? Small com­pa­nies can prob­a­bly use them, but in their place I would use one of the numer­ous alter­na­tives avail­able and not trust a com­pany like that. Big com­pa­nies should avoid Yam­mer at all cost and go with reg­u­lar alter­na­tives (as inno­v­a­tive and SAAS). And that is prob­a­bly the first and only appli­ca­tion I would sup­port the ban of on cor­po­rate networks.

UPDATED – 12/21/08 : Included full quote of Bernard Lunn’s arti­cle on RRW instead of just a link.

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  • http://www.yammer.com David Sacks

    Julien:

    In con­trast to your asser­tions, Yam­mer han­dles the case of for­mer employ­ees well. First of all, com­pany admins can eas­ily remove for­mer employ­ees. The com­mu­nity can also police itself by requir­ing any user to re-confirm their com­pany email address at any time. For large com­pa­nies, Yam­mer plans to add sin­gle sign-on / direc­tory inte­gra­tion shortly.

    Com­pa­nies can also restrict access to their Yam­mer net­work to a par­tic­u­lar IP range, such as their VPN. You fail to explain why this would not keep out for­mer employees.

    Yam­mer also pro­vides a huge advan­tage over tra­di­tional com­mu­ni­ca­tions like email: for­mer employ­ees can eas­ily take com­pany emails with them, or for­ward them to some­one out­side the com­pany. Yam­mer con­tent stays within the company’s net­work on Yam­mer, where it can be con­trolled, deleted, or exported by com­pany admins.

    Your claim to advance the inter­ests of SaaS by slan­der­ing Yam­mer is preposterous.

    Regards,

    David Sacks
    CEO, Yam­mer

  • http://www.macroprinciples.com Julien Le Nestour

    David -
    For for­mer employ­ees, SSO is the only viable option, and as you said you
    don’t pro­vide it, yet you claim you pro­vide a space only acces­si­ble to
    cur­rent employ­ees. This is just not true. All other options involve a man­ual
    step by either admins or employ­ees which ren­ders them unus­able when you have
    more than a few hun­dreds users: you can’t ask IT func­tions to man­u­ally
    man­age this, and if you do, you will have mis­takes. And yes, all large
    com­pa­nies have expe­ri­ence of this type of mis­takes in the past.

    IP fil­ter­ing: some remote access solu­tions can­not be allowed with this. This
    is not the most impor­tant point how­ever: a large part of the value derived
    from Twitter-like appli­ca­tions stems from their acces­si­bil­ity via SMS, from
    any com­puter, etc. I don’t see the point of deploy­ing this if it can only be
    used from the company’s net­work or assets. Do I want to open my com­pany
    lap­top and con­nect via VPN each time I want to update my sta­tus? Not at all.
    This workaround lim­its too much the value of the appli­ca­tion, espe­cially as
    a mobile appli­ca­tion acces­si­ble on the go.

    So, no, until you offer SSO, Yam­mer doesn’t han­dle for­mer employ­ees well. In
    fact, claim­ing that is mis­lead­ing because for­mer employ­ees can eas­ily slip
    through the man­ual mon­i­tor­ing and remain on the net­work for quite some time.

    Regard­ing the value of Yam­mer for secu­rity rea­sons over email, again this is
    mis­lead­ing, since you encour­age the employ­ees to cre­ate con­tent that
    com­pa­nies will want to con­trol, and you make com­pa­nies pay after­wards. I
    could go on and on. As Stowe Boyd found
    out<http://www.stoweboyd.com/message/2008/12/presently—cre.html>as
    well,
    Present.ly is a much more attrac­tive Twitter-like appli­ca­tion for com­pa­nies,
    with a much cleaner busi­ness model.

    Adopt­ing an aggres­sive tone by argu­ing my “slan­der­ing of Yam­mer is
    pre­pos­ter­ous” won’t change the fact that your busi­ness model is essen­tially
    based on a new twist of rack­et­ing com­pa­nies to take back the con­trol over an
    unse­cure dis­cus­sion space.

    PS: And when you will have SSO, you will again make com­pa­nies pay for the
    priv­i­lege to have SSO imple­mented on their net­work. I stand by my posi­tion,
    and would advise any­one to ban access to Yam­mer from the cor­po­rate net­work,
    make it against pol­icy to con­tribute to it, while at the same time imple­ment
    an alter­na­tive like Present.ly where price and con­trol can be man­aged
    prop­erly.

    PPS: Reminder of my dis­claimer: as any­thing on this web­site, this is my
    per­sonal opin­ion, not a pro­fes­sional one nor is it related in any way to the
    posi­tions or actions of my employer.

  • http://www.readwriteweb.com/about_bernardlunn.php bernard­lunn

    Julien, inter­est­ing thoughts in this and other posts. It is inter­est­ing to hear a POV from within a large enter­prise. Pease send me an email so we can con­nect. Bernard

  • jiponet

    Inter­est­ing arti­cle Julien

    As Yam­mer announced that the Yam­mer soft­ware can be installed inside the com­pany fire­walls, does this change your views?
    http://blog.yammer.com/blog/2009/02/yammer-exte…

  • http://www.macroprinciples.com Julien Le Nestour

    Yes, it does.

    I have sent them an email to get more details on the specifics, as they do have an his­tory of inflat­ing their claims, but it looks cer­tainly much bet­ter than before.

  • http://www.yammer.com David Sacks

    Julien–

    Yam­mer now offers direc­tory inte­gra­tion / SSO. We are pilot­ing it with some early cus­tomers and then it will become part of our basic admin tools pack­age on the website.

    Since your orig­i­nal arti­cle, Present.ly copied our approach of let­ting employ­ees sign up with a com­pany email address first, before the com­pany claims the net­work. Obvi­ously they did not believe that their model was the supe­rior one.

    Seri­ously, what’s the harm in let­ting employ­ees test drive a prod­uct before the com­pany buys it? Isn’t that bet­ter than the alter­na­tive? How many times has IT pur­chased expen­sive soft­ware only to see no one adopt it? Yam­mer lets the employ­ees prove the need before the com­pany buys it.

    Regards,

    David

    PS: I like your idea of an enter­prise Tweet­Deck. We will sup­port it.

  • http://www.macroprinciples.com Julien Le Nestour

    Hi David -
    Yes, I’m fol­low­ing up to get more details on the Active Direc­tory
    inte­gra­tion, look­ing for­ward to it.

    The best model depends of the size and busi­ness of the com­pany I think. For
    large com­pa­nies or com­pa­nies in sen­si­tive indus­tries, the claim­ing model you
    have and Present.ly adopted is a neg­a­tive. For small and medium busi­nesses,
    it can be — wrongly in my opin­ion — appeal­ing. So in the end, what mat­ters
    for the start-ups in this space are the respec­tive mar­ket size of the 2
    mar­kets.

    I actu­ally agree 100% with your last point, espe­cially for social enter­prise
    soft­ware. With­out direc­tory inte­gra­tion, my rea­son­ing is: employ­ees can’t
    talk about busi­ness crit­i­cal issues and if Yam­mer just used for casual
    points, not much more value than twitter.

    We agree on the fact that employ­ees should be the ones adopt­ing an
    appli­ca­tion. IT func­tions need to give them the means to do it.

    To facil­i­tate this process, I think adopt­ing the right pric­ing model is
    crit­i­cal. I have described one pos­si­ble model here:
    http://www.macroprinciples.com/2009/02/how-to-p…

    I would be really inter­ested in your feed­back on this point…

    Many thanks for the stim­u­lat­ing points!

    Best regards,
    - Julien

  • http://twitter.com/RossJimenez Ross Jimenez

    Good Post Julien… and I would have to agree with you. It is espe­cially dif­fi­cult for the very largest of cor­po­ra­tions and will lead sim­ply to a “block” by default men­tal­ity. This loss of con­fi­dence is what I have to deal with while try­ing to evan­ge­lize social tools inter­nally which makes my job more difficult.

    In my mind Yam­mer could:

    1.) Offer an opt-out capa­bil­ity that is allow a user from a com­pany to request that they block users from their com­pany, when some­one from @email tries to sign-up they get an email with the person’s mes­sage who requested that they “block” sign-ups for the com­pany. This way the per­son could still engage with the indi­vid­ual to deter­mine proper usage etc.

    2.) Would be to sim­ply pro­vide all man­age­ment fea­tures with a lim­ited num­ber of users, say 50/100 users.

  • http://twitter.com/RossJimenez Ross Jimenez

    Good Post Julien… and I would have to agree with you. It is espe­cially dif­fi­cult for the very largest of cor­po­ra­tions and will lead sim­ply to a “block” by default men­tal­ity. This loss of con­fi­dence is what I have to deal with while try­ing to evan­ge­lize social tools inter­nally which makes my job more difficult.

    In my mind Yam­mer could:

    1.) Offer an opt-out capa­bil­ity that is allow a user from a com­pany to request that they block users from their com­pany, when some­one from @email tries to sign-up they get an email with the person’s mes­sage who requested that they “block” sign-ups for the com­pany. This way the per­son could still engage with the indi­vid­ual to deter­mine proper usage etc.

    2.) Would be to sim­ply pro­vide all man­age­ment fea­tures with a lim­ited num­ber of users, say 50/100 users.

  • Jonathan T

    I know this is an old post and I found it because I do not appre­ci­ate the “spam” that I keep get­ting from peo­ple join­ing yam­mer and “ask­ing” me to join. The thing is, my com­pany is very large and I have no idea who these peo­ple are so I do not know how they are email­ing me.

    I noticed that their emails do not have an opt-out link in them. I went to their web­site and there was no opt-out infor­ma­tion there. Accord­ing to the search results in Google, they did have an opt-out in their pri­vate pol­icy; how­ever, they have since removed this from their pri­vate pol­icy page. What are your thoughts on Yam­mer now that they have been around for a few years?