What is Microsoft getting with LinkedIn?

The deal was announced last June.

There was a lot of speculation. What is the end game?

There was some controversy. Salesforce tried to scuttle the deal.

I think this is Satya’s Mars Shot!

Satya’s Mars Shot

Satya Nadella, the CEO of Microsoft is going on 3 years in his role. He has done a lot of things in these past three years. He has taken a few Moon Shots – acquisitions of Xamarin and over 30 more acquisitions; realized the value of embracing Android and Apple as mobile partners by building / extending solutions; and, significantly, he has taken on a Growth Mindset model for the way Microsoft employees approach the business.

I think LinkedIn is Satya’s Mars Shot!

A big, bold, Growth Mindset move.

What is Microsoft getting with LinkedIn?

It comes down to three things.

1. An extended User Base
2. Access to the Patent Assets
3. An entre to Social Selling

More detail about each is below. Please feel free to add your thoughts and commentary here. I have spoken to a few folks both internally and externally about this and while there are other side benefits I think these form the core.

An extended User Base

LinkedIn has something like 467 million users. Some reports say that only 25% actively use the service. However, the key for Microsoft is that these are not all Microsoft users today. Yes, some will be. But, many of these 460M users may be open for offers that Microsoft can suss out of the data about them.

AI, Machine Learning, and Big Data --- At the core of the LinkedIn acquisition there is a lot of data. Ultimately, there is more to the deal than data, but there is a big component that relates to the processing, analysis, and insights that can be extracted and inferred.

It is going to be up to Microsoft to capitalize on this extended user base.

Will some users turn off their LinkedIn profile? Sure, but I suspect most will take a wait and see approach.

Access to the Patent Assets

LinkedIn has over 1000 patents. These patents were developed or acquired in the 14 years LinkedIn has been around. This is small compared to the roughly 50,000 patents Microsoft already has in their arsenal. But, the LinkedIn patents can give Microsoft access and insights into points 1 and 3.

This might be part of the reason my Marc Benioff of Salesforce was so adamantly fighting against the deal. 

There are a few reasons patents can be useful. One is the obvious … Use Them to enhance your product and services offerings to your customers and partners. The other is … Playing Keep Away … where locking these patents up can effectively take them off the table from competitors. It remains to be seen how Microsoft will use the LinkedIn patent portfolio. I suspect a little of both.

An entre to Social Selling

While the concept of Social Selling isn’t new it is a relatively new concept across the Microsoft product spectrum. Expect to see more Social Selling integrated into the Microsoft Dynamics 365 suite of products. This is not a surprise as Microsoft’s Scott Guthrie said this in some of the press and on-stage announcements.

Social Selling, a definition:

Social selling is about leveraging your social network to find the right prospects, build trusted relationships, and ultimately, achieve your sales goals. via LinkedIn

I expect to see more from Microsoft in the coming months and especially at the Microsoft events --- notably Build and Inspire. Where Microsoft can clearly lay out the roadmap for:

• Technical Adoption - Access to API’s and Tools to create and extend Microsoft products. Think Azure, Office, Windows, HoloLens, and beyond. Partners have great engineers and ideas – empowering them with the tech to build great solutions on the Microsoft platform is critical.
• Business Engagement - This is a partner opportunity too. Microsoft generates 92% of its revenue from partners. Making sure partners understand and are ready to extend and enhance their own products and services is critical to
• Embracing Millennials and Gen Z’s – By 2025 the workforce will be comprised of 75% Millennials. We have to get this right. Millennials understand “social” and they will likely be willing to embrace Social Selling. It is incumbent upon Microsoft and the Microsoft Partner Community to insure this happens – as I wrote about in: Working with Millennials in the Partner Community

Ultimately Social Selling is about nurturing relationships. Microsoft is going to seek to optimize and democratize the ideas and concepts of Social Selling.

“There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.”
The Cluetrain Manifesto

I suspect a large part of the reason Microsoft bought LinkedIn is to get a leg up on Social Selling. Because of this I think Satya’s Mars Shot for the $26B acquisition of LinkedIn is going to be on target.

Wrapping up The Three Points and Adding 2 Bonus Points

There you have it. I am sure these will morph over the coming weeks and months. Inevitably some of the patent assets will be baked into other Microsoft offerings and while being transparent they will drive a lot of value.

LinkedIn is a sizable company in an of itself. With over 10,000 employees and a few key acquisitions LinkedIn made over the years there are some added benefits that should also be considered --- including Acqui-Hire and Lynda.

Acqui-Hire is a Bonus

It’s a bit of an Acqui-Hire too. Not all of the executives from Microsoft acquisition stick around, but many times they’ll stay on for a year or two to smooth the process.

Sometimes, as in the case of the Yammer and Skype acquisitions a few of the execs stayed on board and fundamentally changed the way Microsoft was working – in both technical and business aspects.

Acqui-Hire is a portmanteau of Acquire and Hire. Where the employees of the acquired company can bring their specialized expertise into the new company.

Lynda could be a Game Changer too

A few years ago LinkedIn bought Lynda. A training resource that allows people to take online courses to “Learn Business, Technology, And Creative Skills.” Adding Lynda to the Microsoft product sets could put a few of the independent training firms on notice, but it can also enable them to extend their skills in the Microsoft Partner Community.

Lynda could be a game changer in a lot of ways – not the least of which is as a place where Millennials and Gen Z’s can get (and give) training. It’s easy to see the model being used within Microsoft Office. It’s not too much of a stretch to consider add-on functionality for Minecraft, Hololens, and XBOX – whether it’s for using the products or building the next generation of products and users.

What do you think?

• Is LinkedIn a smart acquisition for Microsoft?
• Was $26 Billion too much?
• How do you envision the next steps for LinkedIn and Microsoft?

Add your thoughts here in the comments or ping me at my contact points below. This is early days for Social Selling (at least within Microsoft). I suspect the data parsing of the user base along with the added value of a familiar interface (The LinkedIn UI) will allow Microsoft to move fairly quickly.

Image Credits: LinkedIn, Microsoft

Jeff is business advisor, mentor and community engagement expert. He has spent most of his career in the Enterprise Content Management industry. He brings over 20 years of Channel Sales, Partner Marketing and Alliance expertise to audiences around the world in speaking engagements and via his writing. He has worked for Microsoft, Kodak, and K2.

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