Quick Thoughts: MSFT – Adding LNKD to its Professional Network
– MSFT completed the acquisition of LNKD Thursday, after the EU gave its approval without asking for major concessions.
– CEO Satya Nadella posted to LNKD, highlighting a list of near-term actions to develop synergies, including explicit links between the companies’ core products, aggressive development of the social selling initiative within the Dynamics ERP platform, and establishing a business news distribution system.
– We believe that there are far more substantial long term synergies from the combination, most stemming from applying AI to data generated by both MSFT and LNKD SaaS services to discover productivity enhancing insights for both workers and management.
– We have written at length on MSFT’s AI-focused strategy for the enterprise (http://www.ssrllc.com/publication/msft-an-ai-powered-vision-for-the-future-of-enterprise-computing/)
After promising the EU that it would let rival “professional networks” access its applications on equal terms and that it would allow consumers to turn off any default connections, Microsoft completed its deal for LinkedIn on Thursday. The concessions to the Europeans are insignificant – Alphabet, Apple and Amazon execs must be rolling their eyes at their rival’s gentle treatment by Brussels. Now, of course, the hard part begins.
CEO Nadella posted his thoughts on the occasion to his increasingly busy LinkedIn account. After the fluff about “common purpose” and “cultural similarities”, he listed 8 examples of product/service integration that could be implemented in the immediate term:
• LinkedIn identity and network in Microsoft Outlook and the Office suite
• LinkedIn notifications within the Windows action center
• Enabling members drafting résumés in Word to update their profiles, and discover and apply to jobs on LinkedIn
• Extending the reach of Sponsored Content across Microsoft properties
• Enterprise LinkedIn Lookup powered by Active Directory and Office 365
• LinkedIn Learning available across the Office 365 and Windows ecosystem
• Developing a business news desk across our content ecosystem and MSN.com
• Redefining social selling through the combination of Sales Navigator and Dynamics 365
The first six are straightforward mash-ups between existing capabilities on LinkedIn and within Microsoft’s application and operating platforms. The seventh, proposing a business news distribution service accessing both LinkedIn and Microsoft touchpoints, is interesting. Such a service would slide in amongst Bloomberg’s dominant but static financial industry presence, Yahoo Finance’s crumbling consumer service and Twitter’s role as the fastest straight line between two points. We will be curious to see more details on this. The last, levering LinkedIn’s social selling concept, is one of the main rationales for the deal. Getting Sales Navigator tied to Dynamics and in the market quickly will be key to assuring investors, who are often skeptical about strategic synergies.
Of course, we think Microsoft has a lot more up their sleeves than that. LinkedIn will be part of a grand strategy to remake enterprise productivity and operations software using artificial intelligence. We recently wrote extensively about this (http://www.ssrllc.com/publication/msft-an-ai-powered-vision-for-the-future-of-enterprise-computing/), seeing substantial potential to use data from Office 365, Dynamics, and LinkedIn to offer organizational insights to Microsoft enterprise customers. The more data and the wider the functional perspective, the more valuable those insights will be. Moreover, we believe that Microsoft’s AI-driven Cortana can become a powerful interface tool across the company’s applications and platforms within the enterprise, helping users access the information and tools they need quickly and efficiently. Given Microsoft’s substantial technical lead over almost all of its would be enterprise competitors, we see huge opportunity for it to dramatically expand its share of global IT spending.
We expect to see Nadella and company keep up the good work throughout 2017, posting cloud driven upside surprises and ticking off milestones toward the AI-dominated future.
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