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Microsoft’s $1.2 Billion Ticket to “Social Business”

If you were wondering when Microsoft was going to join the social party, they’ve shown up in a big way.

The software-maker is agreeing to buy Yammer, a social network for the workplace, for $1.2 billion. It’s a lot of money to put on the table, but the acquisition immediately catapults Microsoft into the social business, sometimes referred to as "social enterprise," space, where it was largely seen to be standing on the sidelines.

Indeed, as Gartner analyst Larry Cannell explained to ComputerWorld, Microsoft has fallen behind enterprise competitors like SAP, Oracle and Salesforce.com when it comes to cranking out truly social tools. "Microsoft has the weakest social play in the market. With Yammer they would immediately become a very strong competitor in the social workplace."

Not that Microsoft lacks collaboration tools. But many in the marketplace view technologies like SharePoint and Exchange as old and stodgy. Incorporating Yammer, which works much like a Twitter for the office, will help shake off the dust.

Salesforce’s CEO, Marc Benioff, has long trumpeted the social enterprise. (If you attended Dreamforce last year, you saw and heard it firsthand.) And the company has backed up their words with acquisitions of social brands like Buddy Media and Radian6.

By far, Salesforce’s Chatter product, which competes with Yammer, has been on the forefront of social, allowing colleagues to share information, projects and achievements on the fly. If Microsoft was going to trade punches, they needed their own Chatter.

Most importantly, Microsoft’s purchase of Yammer – with a hefty price tag – further validates the concept of the social enterprise. It’s a ringing endorsement of the concept that communication among colleagues will flow more freely between departments and regardless of title; that the same tools we use to share photos and quirky updates with friends and family can be used to strengthen collaboration and ingenuity at work.

It’s a big move for Microsoft, an even bigger move for the social enterprise.

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