Microsoft is planning a major assault on the social networking market with a US$1.2 billion (Dh4.4bn) acquisition of Yammer.
The Yammerpurchase will allow Microsoft to add social networking to its Office set of business tools. The Seattle software giant's Sharepoint software already allows users to collaborate on projects. But as yet, the company has no effective social networking service for business users.
"Microsoft Sharepoint is where people do work. Yammer is where they talk about it. Although Sharepoint has the ability to allow this, its interface is not as user-friendly as that of Yammer," says Richard Edwards, an analyst at the international research company Ovum.
According to Duncan Clark, a senior analyst at the research firm Canalys: "Microsoft's latest move to acquire Yammer demonstrates the vendor's strengthening commitment to the enterprise communications market.
"This development is another indication that the market is moving away from traditional communications technologies to richer and more integrated social networking and collaborative solutions. This market continues to gather momentum."
Although the underlying technology that powers social networking is hardly new, it is now being introduced in a far more palatable form than in the past.
"While it is true that the internet forums of 20 years ago could be used to achieve the same thing, Yammer is more suited to the needs of users familiar with existing social networking services such as Facebook and LinkedIn," says Mr Edwards.
In servicing fully integrated social networking among staff, organisations can ensure that their knowledge base is accessible to all employees at any time.
"By enabling social networking rather than a direct emailing system between employees, an organisation can tap into hidden pockets of expertise among staff that might not otherwise be identified," says Mr Edwards.
Some industry watchers have already caught a whiff of desperation in Microsoft's attempt to enter the social networking market at this stage.
"Right now everyone is talking social networking in this class, and if you don't have a solution you are seen as out of date and thus out of luck. Yammer is fixing a critical technology shortcoming for the firm," says Rob Enderle of the Enderle Group, a Silicon Valley analyst.
Microsoft hopes that by buying an off-the-shelf service it can close the time gap on competitors and bring its own full-fledged social networking service to the market faster. It is also seen as a move by Microsoft to revive its Office toolset. Although the firm has never fully revealed the importance of its Office software, competitors believe that it has traditionally accounted for up to half of its profit.
But many of the features of Office are now widely available free of charge from other sources over the internet, and the Microsoft product is showing its age. Even businesses that have been loyal to Office are now starting to question the wisdom of paying high licensing fees indefinitely. It is, therefore, essential that Microsoft have a popular addition such as social networking.
But even this may not be enough to drag Office software kicking and screaming into the 21st century.
"It faces a tough battle with a social networking platform pitched against consumer alternatives. In the workplace, people still gravitate towards social networking platforms that they are familiar with from the consumer world," says Mr Clark.
There are also fears that Microsoft's track record of losing newly acquired key staff in the period after a corporate merger may prove a problem. Some of the Yammer staff may jump ship as soon as they can after the acquisition.
"Yammer is fixing a critical technology shortcoming for the firm. However, Microsoft has a poor employee retention history after acquisitions like this," Mr Enderle says."If they don't correct that, much of the value of Yammer will likely end up over working for Google, whose strategy with regards to this stuff is to mine someone else, in this case Microsoft, for talent as opposed to buying the firm."
But Microsoft still has a vast business customer base that remains loyal to its software. In medium to large enterprises, in particular, the costs of retraining staff to use rival software and services can be prohibitive.
business@thenational.ae
Indoor cricket in a nutshell
Indoor Cricket World Cup – Sep 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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