What will Microsoft's LinkedIn deal mean for CRM and social users?
Make no mistake, Microsoft’s $26.2 billion swoop for LinkedIn is a monumental deal. It’s monumental from a financial perspective – there’s no denying it’s a lot of dosh. It’s monumental from an industry point of view – with two heavyweights involved, this is headline news.
But it’s also potentially monumental in terms of the influence it could have on businesses and professionals. LinkedIn is used by over 400 million businesspeople the world over, while Microsoft has an ecosystem of over one billion customers - all of which could be impacted by this deal to a lesser or greater extent. Response to the news has been generally positive, both for Microsoft and LinkedIn.
Unsurprisingly, however, there was also some despair amongst LinkedIn users, concerned about the implications for the network - as well as some concerned Microsoft customers.
So what is likely to be the real impact of the deal?
In a lengthy blog post, LinkedIn CEO Jeff Weiner outlined the strategic rationale behind the deal, insisting that “combining forces” with Microsoft would provide “the next stepping stone” toward realising the professional network’s mission and vision.
This is possible, he explained, because “we’re both trying to do the same thing but coming at it from two different places: For LinkedIn, it’s the professional network, and for Microsoft, the professional cloud”.
Weiner’s goals for the Microsoft-LinkedIn union included:
- “Massively scaling the reach and engagement of LinkedIn by using the network to power the social and identity layers of Microsoft's ecosystem of customers. Think about things like LinkedIn's graph interwoven throughout Outlook, Calendar, Active Directory, Office, Windows, Skype, Dynamics, Cortana, Bing and more.
- Accelerating our objective to transform learning and development by deeply integrating the Lynda.com/LinkedIn Learning solution in Office alongside some of the most popular productivity apps on the planet.
- Expanding beyond recruiting and learning & development to create value for any part of an organization involved with hiring, managing, motivating or leading employees. This human capital area is a massive business opportunity and an entirely new one for Microsoft.
- Giving Sponsored Content customers the ability to reach Microsoft users anywhere across the Microsoft ecosystem, unlocking significant untapped inventory.
- Redefining social selling through the combination of Sales Navigator and Dynamics.”
Some ambitious goals, but also some sensible synergies.
CRM and social media consultant Paul Ince expects that publishing to SlideShare from PowerPoint will surely be one of the first updates that will come to fruition. But the big news, he believes, will be the implications for CRM.
“The LinkedIn acquisition makes so much sense for Microsoft and it’s clear the intention is to integrate deeply with Microsoft Dynamics CRM and Office,” notes CRM and social media consultant Paul Ince. “Social selling, and the ability to understand your prospect/customer before and during your conversations with them is now fairly mainstream.
“What LinkedIn gives a CRM user is the knowledge about their contact’s activity in an instant. What are they posting about? Which awards did they win? What’s their latest promotion? All these insights give the user conversation material and help them form a deeper connection with their contact and keep them close. As anyone who has tried to gain access to its API will know, LinkedIn has always been highly protective of its data so it’s quite a coup for the Microsoft range to have what will presumably be exclusive access, ultimately.”
Indeed, while integrating the Lynda.com/LinkedIn Learning solution in Office, and opening up the human capital field is seen as an enormous opportunity for Microsoft, the implications for CRM and social selling have been noted as very obvious wins from the deal.
Social selling expert and CEO of WSI-eMarketing, Rob Thomas, notes: "Although it's early days, my initial thoughts on the acquisition is that strategically the alliance makes a great deal of sense. Microsoft Dynamics CRM working with the intelligence gathered through effective social selling techniques, utilising LinkedIn in the business to business world, could indeed empower the world's professionals. The slide included in the announcement pack headed "Connecting the professional world" alludes to the massive opportunity that the synergy between 'Microsoft Graphs' and 'LinkedIn Graph' provide.”
CRM consultant Richard Boardman, founder of Mareeba Consulting, adds: “From a CRM perspective it does potentially offer the scope for some really deep integrations that could give Dynamics CRM a real competitive edge over its rivals. I suspect Salesforce.com might be a little shell shocked by this one.”
Others, however, are more circumspect about the prospects of the deal.
Richard Edwards, principal analyst for enterprise ICT at Ovum, says: “This is a huge amount of money for a subscriber base, but it signifies what’s at stake here, i.e. Microsoft’s multibillion-dollar enterprise business. With Facebook at Work on the horizon, $26 billion is the kind of “all-in” bet that Microsoft needs to win as it takes-on the behemoth of the consumer social networking world.
“If the acquisition is handled well, the deal could bolster Microsoft’s position in the CRM market, enabling members of the business network to engage more effectively in B2B activities. This is especially important from the perspective of Microsoft’s competitive stance against Salesforce.com.
“On paper at least, LinkedIn appears to be a natural complement to Microsoft’s burgeoning cloud services, Office 365 and Dynamics. But Microsoft has been here before, when it acquired Yammer in 2012 for $1.2 billion. That acquisition didn’t really deliver on its promise, and only served to confuse and complicate enterprise collaboration strategies.”
Indeed, the way the Yammer acquisition has played out should be a concern for LinkedIn.
Joe Barnes, Head of Digital, creative communications agency W says: “For LinkedIn, on the outset all appears positive, with the same team, culture and operational structure staying in place. However, the same was said for Yammer upon acquisition announcement. Currently, despite the external Yammer SAAS offer looking much the same, the operational set-up has drastically changed from CEO David Sacks leaving two years in, to the sales teams being replaced by Microsoft black belts. Time will tell if the future holds the same for LinkedIn, but at a guess a Yammer-type journey looks likely.”
And with such large amounts of money involved, the deal isn't without its dangers for Microsoft. Rob Thomas believes that Microsoft needs to proceed with caution. “If the alliance is to endear itself to the professionals of the world, rather than alienating a large percentage, they should not cut off other CRM or marketing automation platforms from working with LinkedIn through approved APIs,” he suggests.
“There is an unfortunate history of 20+ year established supertankers acquiring younger entrepreneurial businesses and then suffocating them. Microsoft themselves didn't do themselves any favours with the Yammer acquisition four years ago, for example.
“Whilst I'm personally a big fan of LinkedIn's Sales Navigator, if I had been forced to upgrade in the way that Windows 10 tries to every day I wouldn't have been so impressed! As someone who has been passionate about social selling before the phrase was even coined, I saw the prospect of a Chinese Wall being built between LinkedIn and other CRM systems as a real threat. However, the slide entitled 'Selling to Social Selling' gives me some confidence when it's phraseology is "Users of Dynamics CRM and all other CRM systems will want to directly connect with LinkedIn sales navigator".
"Provided they stick to this policy I believe the brakes are off for continued growth of LinkedIn in the environment of social selling, and the additional synergies and investment from Microsoft can take them to a whole new level."
As for concerns about how the deal may impact LinkedIn, Edwards notes: “LinkedIn provides business professionals with an important contact and engagement network, but only hard-nosed sales folk appear to be willing to pay for the extra benefits that are associated with a subscription to the service.
"However, if these benefits (including access to the online learning site Lynda.com) are offered to individuals as part of Office 365 Personal, or one of the business or enterprise SKUs, for an additional feel, then Microsoft might be onto a winner.”
Time, of course, will tell. But filling the vacuum in the meantime will be plenty of debate about the implications of this monumental story.
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Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.