You might have heard: Microsoft is buying LinkedIn for $26.2 billion in one of the most significant enterprise software acquisitions in some time. There will be plenty more to parse about the deal in coming months, but here are five key, immediate takeways about what it means.
Microsoft wants to change the way you work: On a conference call, executives from both companies discussed how LinkedIn will become a type of "social fabric" across Microsoft's Office 365, Dynamics applications and other assets such as the Cortana digital assistant.
"There are integration points between office and Linkedin today, but imagine when the functionality is native," says Constellation Research VP and principal analyst Alan Lepofsky. "What if in a Skype chat, I could see your work history? What if a Outlook calendar could create a Onenote page for each meeting and include the LinkedIn info about the external participants?"
Other possibilities abound, such as having LinkedIn's newsfeed—which is already the fastest-growing user engagement component of the site today—be informed by the projects you're working on, or the contents of your meeting calendar, officials said on the call.
It's about supercharging CRM: Microsoft has plans to deeply integrate LinkedIn's Sales Navigator social selling tool into Dynamics CRM. The idea here is to help salespeople turn cold contacts into "warm" ones thanks to a little bit of social network lubrication. Navigator has a few core functions, such as helping salespeople pinpoint more promising and targeted leads, as well as keep up to date with contacts' ongoing business dealings and professional activities.
This is Microsoft's leap into HCM: Arguably, LinkedIn's strongest calling card is the wealth of real-time data and insights into how companies are hiring and recruiting workers, officials said on the call. LinkedIn can show companies an aggregate view of which competitors their departing employees are headed to, and in turn which competitors they're managing to poach effectively.
LinkedIn also has made investments in employee learning through the acquisition of Lynda. "The days in which people could get a professional certification and have a job for the rest of their lives are coming to an end, said LinkedIn CEO Jeff Weiner. "People need access to continuous learning. Now imagine the Lynda coursework deeply integrated throughout the Microsoft ecosystem." Six of the top 25 courses on Lynda are already related to Microsoft products, he added.
Those are but two components of the HCM (human capital management) product spectrum. As Microsoft CEO Satya Nadella acknowledged on the call, Microsoft's Dynamics business applications focus on ERP and CRM, only participating in the HCM world "in a very light way." Taking what LinkedIn has and expanding it into Dynamics is "the next set of things we're going to do," Nadella said. It's not clear Microsoft has aspirations for areas such as core HR, but LinkedIn clearly will take Dynamics in a new competitive direction.
They (say) they won't mess up the user experience: If you're a diehard user and fan of LinkedIn, rest easy as far as the user experience goes, according to Nadella. "One thing that’s very important to us whether it's Office 365, Dynamics or LinkedIn, what’s paramount is usage and satisfaction," Nadella said. “That’s what’s going to be driving our product agenda. I don’t expect anything to change, but things will be enhanced. There will be more value to being a LinkedIn customer, an Office365 customer and a Dynamics customer.”
About that security question: Given how much personal data people have sloshing around in LinkedIn, and in turn how much sensitive corporate data resides in Microsoft applications, the natural question is how Microsoft plans to address security when it comes to integrating LinkedIn to its own world. Microsoft has thought about this, Nadella said. "The key here is that we will keep these two worlds separated," he said. "Nothing will get linked or connected without customers opting in, and with the provisioning of IT principles around it. But we believe customers will want to integrate this because they'll see the value."
For more on the acquisition's implications, check out Constellation Research VP and principal analyst Alan Lepofsky's video blog report at this link.
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