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Yammer opens new office in London's Tech City

Microsoft says investment will help drive sales of Yammer's premium service in EMEA

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Microsoft has become the latest US computing firm to invest in east London’s burgeoning technology cluster, with the opening of a new office for its enterprise social networking subsidiary Yammer on Great Eastern Street.

Yammer, which arrived in London in March 2011, said the move to a larger premises is the result of the health of its EMEA (Europe, Middle East and Africa) business and subsequent growth of the team from three to 85 employees. EMEA accounts for around half of all Yammer’s revenues.

The new office will also host a developer centre - the first located outside the company’s San Francisco headquarters.

Speaking at the opening of the new office last night, Georg Ell, EMEA general manager for Yammer, said that in bringing the people who design and make the product together with those that sell it and provide customer support, he hoped to see some “magic” happen.

“This move is a significant sign of the appetite for enterprise social networking and collaboration tools in the UK and EMEA at the moment,” he said.

Microsoft bought Yammer, a maker of cloud-based enterprise social networking software, for $1.2 billion (£768m) in June 2012. The company has become part of Microsoft's Office Division, headed by President Kurt DelBene.

Yammer co-founder and CTO Adam Pisoni admitted that there had been some “initial confusion” about the Microsoft offer, but said the two companies share a lot of the same cultural tenets, and both believe that cloud computing is the future.

“We had been working on the assumption that the biggest software company in the world didn't understand the future. Well it turns out that they did,” he said.

He added that Yammer is particularly excited about integrating with Office 365, because content collaboration was one of the company’s key focus areas ahead of the acquisition.

While details on the integration are still scant, Yammer’s chief customer office David Obrand said that it would be “much more than just a Yammer tab in Office and feeds on the side of files. It's going to be very seamless.”

More details about the integration with Microsoft will be announced later this year.

Although Yammer is not yet profitable, the company is adding over 200,000 new users every month. Much of this growth is driven from the company’s “bottom-up” model, whereby employees “self select” the free technology and usage filters up to management level, according to Pisoni.

Once enterprise social networking becomes ingrained within a company’s culture, management may choose to upgrade to the premium version of Yammer, which gives them more control and allows them to personalise integrations with other enterprise applications. Around 20% of Yammer users are premium customers.

Ell said the development of the company’s “customer success” team has really driven the conversion rate, by partnering with customers to them help them set up the service, integrate applications and design future road maps.

“This has driven 6x growth in London alone,” he said.


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