Microsoft/LinkedIn – The Greatest Large Tech Acquisition of All Time!


Woah. $26.2 Billion. That’s a lot of money. Even in a world where we have become numb to “Uber” large numbers, this is a big deal. And most big acquisitions turn out poorly. Lets list a few: HP/Compaq; Autonomy/HP, Veritas/Symantec, Oracle/Sun, Google/Motorola….need I go on?

So there are many who will be skeptical, but here are three reasons why this will be the greatest large tech acquisition of all-time.

LinkedIn Data is a once in lifetime resource

Data about our professional lives is very, very valuable. As a businessperson, I live in LinkedIn and increasingly in their mobile app. Business is built on connections and every meeting or potential meeting starts with one question: “Do I know this person or do I know someone who knows this person.” LinkedIn is the only professional resource that can quickly answer this question. If Facebook deleted my account and connections, it would be inconvenient for me. But if LinkedIn deleted my account and my 2500 connections, I would be devastated. LinkedIn is mission critical to every professional. If you are hiring, marketing or selling, LinkedIn is a resource that you cannot do without.

Better yet for Microsoft, LinkedIn does not and likely will not have significant competition. The network effects of LinkedIn are too great. I mean would you join another professional network as an individual? Of course not! It would be too much hassle to maintain your data and connections on two networks. 

The Companies’ Products are Complementary and will be “Better Together”. 

Microsoft has at least three product areas that will directly benefit from some deeper LinkedIn integrations.

First, Directory Systems. Microsoft was the unquestioned leader in on premises directory systems and is moving that aggressively to the cloud. But LinkedIn is the real directory system of business now. We don’t need a business card, an email address or a phone number to keep connected now. If we are connected on LinkedIn we will always be able to contact that person. Creative product integrations here could be very powerful.

Second, Office 365 and LinkedIn could be very powerful together. Calendar integration in LinkedIn’s mobile app is already a killer feature, but infusing email, calendar, collaboration and documents with your external business network could open up a new level of functionality that others would find difficult to match.

Third. Dynamics and CRM. Microsoft is not the leader here and before this morning’s announcement it was difficult for me to see how MSFT did not continue to lose share to Benioff and But an integrated Dynamics/Sales Navigator platform could be a game changer. Sales managers love CRM, but salespeople don’t. Salespeople use CRM systems to record activities, but increasingly they use LinkedIn and Sales Navigator to connect with customers and prospects. Sales Navigator is still an early revenue stream for LinkedIn. It’s less than 10% of their revenues! Customers are clamoring for more integration between CRM systems and LinkedIn Data. If Dynamics has a first mover advantage on that, then it could really help in the battle versus Moreover, Sales Navigator could get a huge lift by leveraging the Microsoft corporate sales force. MSFT has relationships and contracts with every large company and can reach the mid market through its extensive partner network. Selling Sales Navigator through that network could provide the type of synergy that even the most aggressive investment banker did not model.

Artificial Intelligence and Machine Learning.

Do not groan. These words are the basis for most Silicon Valley jokes right now. But over the longer term, they are very important. And with all due respect to my LinkedIn friends, I do not believe they were positioned to be leaders here. It is very hard for LinkedIn to compete with Google, Amazon, Facebook and Apple here. And yet LinkedIn has a treasure trove of data that the world’s best AI and Machine Learning people would love to have. I would love to see more predictive features out of my LinkedIn data. They could start with better algorithms for my LinkedIn news stream. :-). But that’s the tip of the iceberg; applying AI to this data might provide insights for professionals that we cannot even imagine today.

So, that’s my take. Its bold- The Greatest Large Acquisition in the History of Tech! I hope that once the acquisition is complete that MSFT continues to break out revenue results for LinkedIn so we can track it progress.

And Congrats to both Microsoft and LinkedIn!