Yammer plans to boost sales, engineering staff with new funding

IDG News Service - Enterprise social-networking software vendor Yammer plans to beef up its sales and engineering staff with the latest funding infusion from investors, an US$85 million financing round.

Yammer will also use the money to boost its advertising and marketing, and it may also acquire other companies to boost its cloud-based enterprise social networking software, which provides Facebook-like and Twitter-like functionality adapted for workplace collaboration.

The funding round should yield positive results for Yammer customers, particularly the investments in engineering, according to Rob Koplowitz, a Forrester Research analyst. It will also help them build a broader partner ecosystem, he said via email.

This latest funding round, led by DFJ Growth, brings the total raised by Yammer to $142 million since its founding in 2008, the company said in a blog post.

About 4 million people use Yammer's software. Clients include 85 percent of the Fortune 500 companies.

The consensus from industry observers is that interest for this type of software is gaining speed among enterprises that want to improve communication and collaboration among employees through professional profiles, status updates, microblogging, document sharing and the like.

The vision is that this type of software can add a "social" layer to existing collaboration and communication tools, like email, IM, office productivity suites, enterprise applications, Web meetings, video conferencing and traditional collaboration platforms.

Yammer recently announced that it tripled its sales last year, results that are consistent with the overall growth trend in this enterprise social collaboration software market, which Forrester Research forecasts will grow at a compound annual rate of 61 percent through 2016, when spending for these products will reach $6.4 billion.

However, Forrester also warned that among the information workers who have access to enterprise social collaboration software, only 8 percent of them use the software at least once a week.

Last week, Altimeter Group published a report that concluded that most companies aren't implementing and using enterprise social networking products properly, leading to unmet goals.

Mistakes that lead to flawed implementations include failure by organizations to clearly define the reasons for adopting this software, according to Altimeter's report, which found that it's common for interest in these products to drop sharply after an initial surge of enthusiasm among end users.

Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.