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Microsoft & LinkedIn

The news that Microsoft purchased LinkedIn shocked lots of people and it’s an interesting move and one that is in my opinion a great one for Microsoft as long as they exert self controls. Microsoft have much to gain from this acquisition but the biggest threat to its success is themselves.

Microsoft gain an online presence

Let’s face it. Microsoft are virtually non-existent in the online world other than as a source of patches, updates and marketing materials.  They have never had any success in establishing an online presence and this gives them a fantastic presence instantly.  While people may question the engagement LinkedIn has, it is still far above what any Microsoft property currently has.

Regain the micro market

Microsoft have all but completely lost the micro market. No sensible small business would not go with pure online offerings and, in this space, Microsoft are extremely weak.  Smart SME’s and start-ups rarely use Microsoft for their day to day business. They use Google apps, Salesforce, Xero and a host of other pure online applications that all play way more nicely together.

Compete with major new players

Salesforce has completely taken out the CRM market and Microsoft Dynamics has not been able to compete.  The acquisition of LinkedIn gives Microsoft a fantastic opportunity to mix Dynamics with up to date people data, something that Salesforce has been trying to do for ages. With the recent rumours that Amazon may buy Salesforce, this is also a play for the cloud platform space as Microsoft are basically a minor player in this world and would be completely dwarfed by an Amazon/Salesforce combination.  What Microsoft can now do is allow people to build applications on top of the online business directory which will appeal to a huge number of people.  However they need to make sure the apps do not overpower the platform and exhaust the current LinkedIn users.

Stop anyone else

It’s a highly defensive move. Let’s face it, if LinkedIn was bought by any one of the top online players, basically Microsoft would struggle to compete and get back into the same space, especially if it was someone like SalesForce.

Niche wins

There are a lot of small wins in this for Microsoft. Slideshare is a natural bedfellow for Powerpoint. The LinkedIn directory data is a natural match for Active Directory (AD). These can be leveraged in a variety of ways.

Fantasyland

The obvious play is to become the Facebook for business, this will work to a degree within the small/micro business market and to a degree within the bigger marketing automation market players. We could see intelligent contracts being introduced based on blockchain and a raft of other clever things being added.  However this ends up being a very dangerous game where the key is to not be consumed by your own success. As it stands we (regular LinkedIn users) are probably at the limit of the amount of notifications / data coming at us from this source, much above where we are now and it all just becomes spam as it becomes impossible to discern the valuable content from the junk. The more this happens, the more we just naturally categorise it all as junk.

Summary

The winners here are unquestionably the LinkedIn shareholders. For Microsoft, it may slow their demise and, if they exercise real control over their natural tendencies and put some very clever people in positions that allow them to do what’s necessary, it could turn out well for them.
However one has to feel that it will just become the directory for Office 365 and then all its own value is lost as it just becomes a route to constantly push Office and other services. This will be a shame, but hey, the guys did well out of it.