Posey's Tips & Tricks

Much Ado About Microsoft's LinkedIn Acquisition

Could the buy be aimed at strengthening Microsoft's consumer experience?

Last month the tech blogs were all going crazy with commentary about Microsoft's multi-billion-dollar acquisition of social network LinkedIn. Most of the articles that I read conveyed a sense of bewilderment, with one even going so far as to question whether Satya Nadella had learned anything at all from the ill-fated Ballmer years. Remember the Nokia acquisition? Of course there were also the usual, predictable apocalyptic posts from those claiming that this move would mark the end of Microsoft.

I have to admit that I found Microsoft's acquisition to be a bit odd at first too, so I wanted to take some time to really think about what might be going on before I wrote about Microsoft's decision. So before I tell you my thoughts on the deal, let me just say up front that I have no inside information whatsoever. Anything that I write here is based solely on my own thoughts.

So with that said, I think that Microsoft's decision is based on trying to position itself for the future. It really is that simple. Think about it for a moment. The world of IT has changed dramatically over the last decade or so. Just a few of the major trends that have disrupted the industry have been server virtualization, cloud everything, social media, the consumerization of IT, and the list goes on.

So with this in mind, there are a couple of things that Microsoft simply cannot ignore. First, social media is more than a fad. At this point I think that it is safe to assume that social media has stood the test of time. Out of curiosity, I took a look at my Facebook account, and my first post was in 2008. That was eight years ago, and I was late to the party. Many of my friends were on Facebook long before I was. And it's not just Facebook -- everything is social these days. Almost every Web site contains a discussion board. Pretty much every retail site contains product reviews. Social interaction has become the accepted norm for online content.

The problem with this, of course, is that Microsoft has traditionally been weak in the social networking space. Sure, Microsoft has Yammer, but Yammer adoption has been ho-hum at best, and is really geared for a business's internal use, not for general purpose, public social networking.

Another trend that Microsoft can't ignore is that the company has lost its dominance in the consumer space (with the exception of Xbox). Believe me when I say that it pains me to write that, but it's the truth. Consumers gravitate strongly toward products from Apple, Google, etc. Microsoft's stronghold is business environments. Microsoft is doing quite well with Office 365, Azure and its various server products.

Microsoft's role in the world has changed. Back in the '90s (the Gates years), it seemed as though Microsoft was going to achieve world domination. Today, however, Microsoft reminds me more of a company like EMC -- huge in the enterprise space, but not a player in the consumer space.

Given those and other factors, I think that Microsoft's acquisition of LinkedIn makes a lot of sense (although the price does seem a bit steep). By purchasing LinkedIn, Microsoft is sending a message to its customers that it takes business seriously.

Of course the question then becomes, what is Microsoft going to do with LinkedIn? Over the last few weeks, I have read a lot of theories about Microsoft's plans for LinkedIn, some of which have been REALLY strange. Even so, none of the theories that I have read seem to adequately justify Microsoft making such a massive investment, so let me pose a few theories of my own.

I think that Microsoft will initially go for the low-hanging fruit, and extend Dynamics to support LinkedIn integration. For those who might not be familiar with Dynamics CRM, it is a suite of Microsoft products that manage customer relationships, supply chains, etc. LinkedIn contains a wealth of information about a huge number of professionals, and it therefore makes sense that Dynamics could be used to help businesses to get to know their customers better, and to spot additional sales opportunities by examining social media connections.

Over time, I think that we will begin to see LinkedIn integration in Office 365. It remains to be seen how this integration will work, but Microsoft might perhaps use LinkedIn with Delve. Delve currently exposes trending business documents, but what if it could also automatically expose contact information for trending customers?

Yammer might make for another point of integration. Microsoft could possibly tie LinkedIn and Yammer together as a way of making it easy to stay connected with business contacts.

It remains to be seen what Microsoft actually has planned for LinkedIn, but one thing is for sure. Nobody spends that much money on an acquisition unless they have big plans.

About the Author

Brien Posey is a 16-time Microsoft MVP with decades of IT experience. As a freelance writer, Posey has written thousands of articles and contributed to several dozen books on a wide variety of IT topics. Prior to going freelance, Posey was a CIO for a national chain of hospitals and health care facilities. He has also served as a network administrator for some of the country's largest insurance companies and for the Department of Defense at Fort Knox. In addition to his continued work in IT, Posey has spent the last several years actively training as a commercial scientist-astronaut candidate in preparation to fly on a mission to study polar mesospheric clouds from space. You can follow his spaceflight training on his Web site.

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