Organizing for Velocity Blogs: In previous posts, Pavan Tapadia  and Peter Fishman explained how Yammer uses data and experimentation to guide our product development in order to ensure that what we’re building for our customers will give them maximum value. Put together, these posts illustrate that Yammer is pioneering the new relationship between enterprise software customers and vendors.

In a world of boxed software or on-premises software services, updates were infrequent and aggregate data analysis was difficult or impossible. This shaped the relationships between customers and vendors. I remember being in charge of major enterprise software purchasing decisions as a customer: I’d assess my team’s needs, build a hypothesis about what software features would meet my needs, and go looking to find the software package that had those features. It would sometimes be a year before an on-premises solution was installed, configured and rolled out. Only then could I check my original hypothesis. Also, the software vendor would have no ability to measure the usage of the software package at my company; it would be on me to follow up with my users and survey their usage. Because the investment in evaluation, purchasing, installation and configuration was so high, I’d pick the software with maximum complexity, configurability and breadth of features as a hedge against being wrong about my needs, or against my needs changing over time.

Today, we live in world of freemium software as a service: cloud-based, multi-tenant and with no rollout process. Yammer, for example, is available to any employee at your company to use within minutes, whether or not your company has ever used Yammer and without your IT department needing to do anything. The advantages of the cloud allow us to create a much more valuable customer-vendor relationship.

First, it’s no longer up to a single person or small group to reason about the needs of a huge employee base and find the software that matches those needs. With enterprise software tools available to users to try out for free, customers can take the guesswork out of finding the tools that will be used by employees. I certainly won’t miss sitting through lengthy sales pitches from vendors to try to figure out whether their software is what my company is looking for.

Second, cloud-based, multi-tenant software is available on demand. Software customers can save themselves what used to be a very time-consuming and often expensive installation, setup and rollout process. Upgrades happen automatically in this world. Customers aren’t on the hook to figure out a way to get a new patch deployed if a security issue or bug is discovered. Yammer often rolls out bug fixes within hours of identifying them — and we’re working to shorten this to minutes.

Third, and most importantly, the advantages of cloud architecture — especially around usage data analysis — enable the software vendor to shoulder the burden of keeping up with the evolving needs of the users. A modern relationship with a software vendor should be evaluated based on the ability of that vendor to deliver value over time. Historically, we evaluated vendors by looking backward at what they’d built. Now we can look forward at their ability to execute, learn and adapt.

Many enterprise software vendors have not yet embraced this new reality and are still stuck in the ways of historical software development. They organize as if they’re building something they’ll put in a box or that you’ll download and run on your servers. As Pavan and Fish both pointed out, the key to Yammer’s modern way of building software — and the way we believe all of your enterprise software will be built in 10 years — is to rapidly iterate. The value of an enterprise software vendor provides is not what they’ve built, but in how much of the right thing they can build over the life of your relationship with them as a customer.

In Yammer Engineering, we’ve embraced the idea that our core value comes from our ability to be fast and adapt to changing business needs. We take this so seriously that we’ve organized around it. We’ve eschewed traditional waterfall software development approaches that may have been appropriate for boxed or on-premises software. We’ve even gone beyond the limitations of established Agile practices to build adaptability and speed into our reporting structures and job responsibilities.

Yammer Engineering has found that hierarchies limit both speed and adaptability. Instead of building areas of product ownership into our reporting structures, we’ve organized around having pools of engineers available to work on the area of the product that will return maximum value to our users. Our product team is unconstrained by the org chart when they choose to build cross-cutting features. Small, cross-functional teams are assembled to deliver incremental value quickly, then disband and reform with new goals. This allows us to leverage the real power of cloud-hosted software as a service. Yammer has always been a cloud offering, and we’ve built its assumptions and advantages deep into our foundation as an engineering team.

Yammer Engineering’s organizational methodology is unique and could be a valuable example for anyone looking to build speed and adaptability into their organizations, whether in software development or any other business function. If you’d like to learn more about it and its specifics, please check out the links below:

To learn more about Yammer’s development approach, visit

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