Microsoft purchased LinkedIn for a record US$26.2 billion which makes it the biggest deal Microsoft has ever done. In my view there is no product or 'solution' overlap which makes it look like a good fit but only if Microsoft CEO, Satya Nadella, allows LinkedIn to operate as a stand-alone business unit just as they've done with Skype.
Acquiring LinkedIn is Satya Nadella's first big play to reinvigorate Microsoft's growth but although LinkedIn's shares rose more than 45% on the news, Microsoft dropped almost 3% (Image courtesy of Bloomberg).
This is probably because Microsoft acquisitions have a mixed track record in recent times with both Nokia and Yammer (business instant messaging collaboration) failing to deliver the intended results. Skype, on the other hand, has been largely left alone to continue as the video conferencing giant... LinkedIn should be managed the same way.
Microsoft's heritage and core value offering is integrated office productivity tools and LinkedIn fits the bill while also being a mature and elegant suite of cloud applications. Approximately 420 million professionals (including recruiters, sales professionals, entrepreneurs and marketers) all use LinkedIn to manage their professional networks and careers. But where is the potential benefit for the huge number of joint LinkedIn and Microsoft customers?
Value Driver #1: Microsoft CRM (Dynamics) and LinkedIn Integration. The roles of LinkedIn versus Dynamics (Microsoft Customer Relationship Management) are fundamentally different and this is because one enables people to build both their network and opportunity pipeline, and the other manages qualified opportunities and provides the database for executing lead-nurturing and customer experience.
LinkedIn has the hearts and minds of salespeople because it helps them find the people they need to build pipeline and also the next employer to progress their career.
CRM should be the engine for managing sales process and with real-time LinkedIn data, Dynamics has the capability to do this as the 'single source of truth' about prospects and clients to manage the entire customer lifecycle for marketing, sales, services, support and finance. The very best implement CRM as a coaching platform for sales managers with their people to review opportunity qualification and discovery, call plans, relationship mapping, sales stage progression with action tracking, close/win plans, and much more... all integrated within the CRM.
LinkedIn helps build opportunity pipeline and CRM manages sales process. Integrating the two creates an accurate real-time platform to deliver game-changing customer experience for the entire interaction lifecycle.
LinkedIn and Microsoft CRM create value in their own right but together there are genuine synergies. Could LinkedIn replace CRM? This video discussed that very question and here is the transcript.
Value Driver #2: Integrated Cloud Office Productivity: Google will be watching very closely as this acquisition could enable LinkedIn's InMail adoption to skyrocket if Microsoft intelligently leverages Office365 against Gmail's cloud mail dominance. Salesforce and other CRM vendors will also be worried about this acquisition and what it means for them competitively. Real-time data within CRM is massively important. Microsoft have other cloud application capabilities that start to bring everything together. These include cloud collaboration, messaging and mail.
Image courtesy of LinkedIn.
Value Driver #3: Customer Experience Platform. Outstanding 'customer experience' (CX) is what CRM, marketing automation, business intelligence, process automation, mobile, social engagement and other technologies are meant to enable. Microsoft has assured its relevance in the CRM arena with this acquisition and also brings and new dimension to professional 'productivity', in the office and working mobile. If Microsoft 'does no harm' to LinkedIn while they carefully create a strategy to become the world's leading customer experience platform, then the result will be good for shareholders and customers alike.
The verdict. Although Microsoft is paying top price, this acquisition makes sense if they can deliver the world's leading suite of solutions for creating customer experience. CX is more important CRM... it's already the next big thing. The biggest negative for LinkedIn members is that the acquisition almost certainly means there will be more advertising on the platform as they seek to recoup their investment... let's hope that LinkedIn does not become as cluttered with ads as Facebook.
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Main Image: Source: CNBC screenshot