Yammer CEO: We're consumerizing the enterprise

David Sacks, CEO of Yammer, believes social networking will become ubiquitous collaboration layer across full range of enterprise software

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Knorr: Tell me more about your freemium pricing model and what you think your big revenue opportunities are.

Sacks: We do have a freemium model -- it's free for employees to use Yammer, to try it out. In order to upgrade your network to get the administrative rights, the integration, the advanced security features, the compliances tools -- again, a lot of the things that matter to business owners and IT -- you have to upgrade to the premier plan. The list price on that is $5 per user per month. If you're at a large company, we can talk about volume discounts based on how rapidly we think the product will roll out to your user base.

I should also mention that at the high end, we actually have two business packages: a business package that's for small businesses and an enterprise package for large enterprises. And the difference is in the feature set. The small businesses tend to be more interested in the basic administrative rights, and enterprises want the heavy-duty integration with SharePoint, Active Directory, things like that. So we have two paid plans, plus the free plan.

Knorr: IT departments are often early adopters of new technology. Do you have any examples of how IT has used Yammer?

Sacks: The CTO of Cap Gemini, Andy Mulholland, wrote in a blog post recently about how Yammer had reduced his department's email load by 40 percent. A lot of those emails were help requests around IT issues. So people were just posting them on Yammer. And with most of them, the answer would just be crowdsourced -- they'd get help from all over the company. And then part of it was IT would just check Yammer and get the request there.

We actually have a bunch of IT departments that have seen whatever program they're using to submit IT help requests have now just moved onto Yammer. Sometimes, it makes them have to move a little bit faster, but also it reduces their overall load because people can get help from a wider range of folks.

Knorr: You started out avoiding the stigma of consumer social networking. Is it a source of satisfaction for you that the consumerization of IT is now the hottest trend?

Sacks: What got me interested in this area is I thought that social networking was going to be this huge revolution, and I really thought it could be used to revolutionize the way we communicate at work. In the process, I really did want to consumerize enterprise software. To me, Yammer stands for two movements: one is the movement to bring social networking to the enterprise. The other more generally is to consumerize enterprise software.

We're doing that in multiple ways. One is we're trying to apply a consumer level of usability to enterprise software. We really designed the product thinking about the end-user. We're taking a lot of principles and UI elements that have worked in the consumer space, and we're bringing them inside the enterprise as well.

That's half of consumerization. But the other half is we're actually giving employees a voice in deciding what tools they use because they can just pull Yammer into their company. They don't have to wait for it to be installed by somebody. Employees can start using it for free, message with their coworkers, and then they company can decide to endorse it, pay for it, that sort of thing. It's very similar to what employees are doing with iPads and iPhones. They're saying this is the tool I want to use; this is the tool that's going to make me productive. And come on, IT, let's get with the program.

This article, "Yammer CEO: We're consumerizing the enterprise," originally appeared at InfoWorld.com. Read more of Eric Knorr's Modernizing IT blog, and for the latest business technology news, follow InfoWorld on Twitter.

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