David Sacks is founder and CEO of Yammer, Inc. He has been active in the Internet space for ten years as an entrepreneur, executive and investor, starting with PayPal in 1999. We asked him about Yammer's expanding Enterprise 2.0 offering and why the company went in this direction.   

FierceContentManagement: You recently evolved into a full-fledged Enterprise 2.0 suite. What prompted the change?

David Sacks: Yammer’s evolution from enterprise microblogging to enterprise social networking happened organically with input from customers. Our customers valued the conversations they were having on Yammer but wanted to be able to turn that insight into structured knowledge. The new Yammer does this through applications like Polls, Questions, Tasks and Ideas. Our platform has always had an open API, but now we are making it easier for third-parties to integrate with us and develop useful applications.

FCM: Analyst Dan Keldsen from Information Architected has been quoted as saying that stand-alone tools, like your's, are doomed because of the singular focus. Do you agree? Did you always?

DS: We don't think it's necessary for an enterprise tool to do everything. Lack of focus is one reason why enterprise software tends to be much worse than consumer software. But the ability to interact with applications in the feed is a natural extension of what we do. We plan to continue developing horizontal apps that everyone in the company can use (such as polls, questions, ideas and tasks) while integrating with third-party developers for vertical apps like customer service, document management and CRM.

FCM: At Enterprise 2.0 in Boston this June, I noticed that several bigger companies such as IBM (NYSE: IBM) and Cisco (NASDAQ: CSCO) had a significant presence there. What significance do you think that has on the Enterprise 2.0 space and your company's role in it?

DS: Their interest validates that the market is huge. We believe that every company will eventually need its own private secure internal social network. So the entry of larger players is inevitable. But still, Yammer remains unique in terms of the usability of our product and our freemium distribution model, which allows any user to sign up and begin using the product for free. Once a company sees that Yammer has been embraced by employees and is demonstrating value, they can upgrade to get additional functionality. Our model is a key advantage over larger companies with traditional enterprise sales models because Yammer spreads virally. This is a good deal for customers too because we can pass on the savings and they don't need to talk to a sales person until the product has proven its value.

FCM: In all of these discussions, SharePoint is the 10,000 pound gorilla in the room. How do you compete with and work with SharePoint and remain a relevant entity on your own?

DS: Yammer integrates with SharePoint. We have a webpart for both Sharepoint 2007 and 2010 so users can experience the best of both without having to toggle between two applications. Our customers tell us that Yammer actually helps justify and extend their investment in SharePoint by delivering social features that were otherwise missing.

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