Yammer Moved to Office 365, Co-Founder Leaves Microsoft By Barry Levine July 25, 2014 10:29AM  Earlier this month, Microsoft announced that it was bundling Yammer with the Office 365 versions for schools and midsize businesses. Since social networking as it applies to business is primarily a collaborative tool, the place for Microsoft to put Yammer is with other collaborative tools, like Office 365, said analyst Charles King.

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Microsoft is moving its Yammer product into its Office 365 and Outlook development teams. And Yammer co-founder and chief executive David Sacks announced Thursday that he is leaving Microsoft.Since it bought Yammer two years ago for $1.2 billion, Microsoft has been integrating Yammer into its products as a key business collaboration tool. "Thank you to my current and former YamFamily for six great years and to Microsoft for the last two," Sacks tweeted on Twitter. "I look forward to new adventures." 'A Major Tool' He also sent out a long e-mail to Microsoft employees, saying that Yammer's central belief has been that "social networking would become a major tool for enterprise communication." In a statement, Microsoft thanked Sacks for his commitment to Yammer and Microsoft and wished him the best in his future endeavors. The marketplace is now filled with business collaboration tools, including Jive, Salesforce's Chatter, Convo, VMware's SocialCast, and others. Microsoft CEO Satya Nadella has said that workplace productivity is a central focus at his company, but he has also talked about streamlining the company. The cloud-hosted Yammer allows businesses to establish intranets and extranets with profiles, activity streams, file sharing, discussion forums, blogs and messaging. A key question is how Microsoft sees Yammer at this point. The other Yammer co-founder, Adam Pisoni, told Business Insider that the tech giant now sees Yammer as a "freemium on-ramp to other Microsoft services," instead of the basis for a new collaborative framework for productivity. Yammer for Schools A "Yammer North" unit was created last year to integrate Yammer into Redmond, and to impart some of the dot-com pacing for software releases into the mother ship. Instead of Microsoft's quarterly software updates, for instance, Yammer, like many Net-based startups, updated its software very frequently and responded to feedback from users. The idea was to combine Yammer's sense of speed with Microsoft's sense of scale. Charles King, an analyst with industry research firm Pund-IT, told us that, since "social networking as it applies to business is primarily a collaborative tool, [the place] to put it is with other collaborative tools, like Office 365." "In that way, the move makes sense," he said. However, King asked, "Did Microsoft need to pay $1.2 billion for something they've now [stuck] into Office 365?" Earlier this month, Microsoft announced that it was bundling Yammer with the Office 365 versions for schools and midsize businesses. This allowed subscribers of Office 365 Midsize Business and Office 365 Education to get Yammer/Enterprise edition for free. "This simple licensing change, significantly reduces the friction in cross-organization collaboration and will enable your users to work with customers, partners, and parents and students without having to worry about additional costs," said Enterprise Social GM Jared Spataro in a post on Office Blogs. The company announced in November that Yammer Enterprise was being added to all Office 365 Enterprise plans.