Microsoft is buying Linkedin for $26.2Billion, in the largest deal in its history.
Integrating Linkedin into Skype for business
Today I find people I want to contact with on Linkedin and then change applications to something else to communicate with them, that might well be Skype for Business, but it might well be something else. Merging the two platforms keeps users much more tightly integrated to the Microsoft world.
Linkedin is the sleeping giant of CRM
There is no question Salesforce.com is the monster in CRM, it is both an incredibly powerful platform, and a fercious competitor in its market. It does however have an achilles heel. If the data your business collects about your customer is rubbish, you get rubbish results from it. Considering how venerated the data out put from Salesfroce.com is within most businesses this issues of rubbish in, rubbish out is a huge issue.
Using Linkedin as a CRM system is certainly suboptimal today as it clearly lacks a huge amount of the tools Salesfoce.com posseses, but it does have one huge advantage. The clients keep their data clean and complete for you automatically. For Microsoft to be in a position to merge the data from Linkedin’s 433m users with the tools in Microsoft Dynamics CRM would be an incredibly powerful business tool.
Business process not technology platform
I’ve argued for a long time that the real power of Unified Communications is the ability to integrate communications technology with business process. For the most part that dream has been unrealised. Most UC vendors do little more with their platforms than they did in a world of TDM technology. Users are looking for something more. A tight integration of Instant messenger, telephony, data sharing and video conferencing into a CRM and contacts platform is compelling, once you add tight document creation and distribution technologies such as those in Microsoft Office 365 is truly is gaming changing.
Cisco death struggle
Microsoft and Cisco have been fighting each other through proxy wars for many years, each is the only business the other fear. Cisco had been making much of the running recently with Cisco Spark and although they still have much work to do streamlining their solution it is obvious they were making significant headway. The Linkedin move by Microsoft is however a game changer. Suddenly they will have access to over 400m business professionals, and a platform for a huge number of those people to easily communicate. Whatever the appeal of Cisco Spark, won’t many simply find it easier to simply go to Linkedin, find who they want to communicate with and simply do so directly through that application?
I doubt Cisco are going to stand still on this. Rowan and team will be the group to watch
What happens next?
Mergers and Acquisitions of this scale often cause other players to move in the market, and as a result I predict a number of deals. How about these as suggestions. I’d love to hear your suggestions.
Oracle buys Salesforce.com
Oracle badly needs to both stop Salesforce eating there lunch and could use Salesforce as a buttress against Microsoft. Additionally bringing Mark Benioff into Oracle would help Larry Ellison sleep better.
Facebook buys Zoho, Slack and Vonage
Facebook has been ramping up its business related activities recently, and to compete effectively against Linkedin as part of Microsoft they will need to fill a number of holes. Whether the CRM, WCC and telephony solutions they pick are the same as I’m suggesting is beyond my knowledge, but it seems logical that they will either develop their own, or be too much is a hurry and decide they need to get in the game immediately.
Facebook has even greater reach than Linkedin in over all terms, but desperately needs to ramp up it’s business related activities. Too many of Facebook’s younger audience is fixel, moving to a new platform once it becomes “cool”. Business users are much less likely to move from something all their peers are using, and the network effect far more compelling as a result.
Amazon. Splendid isolation. But for how long?
Today Amazon is one of the big players in the IT market, but they have been remarkably quiet in the customer data and communications space. One has to wonder how long that will continue. Just think of how powerful a communications platform built into the Amazon Store might be for example, and once that is created why stop there.
Conclusions
Microsoft under Satya Nadella is a completely different company than it was under Steve Ballmer or Bill Gates, much less wedded to it’s own platforms and more open to new ideas and new markets. Karl Marx predicted that by the end of the 20th century there would only be 6 companies in a capitalist society. He was obvious more than a little wrong on that score, but I do believe we are witnessing a bout of consolidation in the market. It’s going to be an interesting time, and a suspect the market in three years from now will be barely recognizable from where we presently stand.
Typically an Excession Event happens when a new entrant into a market utterly disrupts by redefining what success in a market looks like. I confidently predict plenty of that moving forward.
About the Author: Simon Dudley
Simon is a contrarian. He makes a habit of being the guy who questions the orthodoxy, the guy who doesn’t believe it just because the good and the great said it’s true. This has not always been good for his ascent up the corporate greasy pole. However it’s been very good for his employers if they are prepared to listen.
The Book The End of Certainty "How to thrive when playing by the rules is a losing strategy" explains why groupthink and the doing what you’ve always done is no longer the right move.
The Excession Events Podcast is available on iTunes and Google Play
He is also a business speaker specialising in the transformation of business models.
To keep tabs on his work please follow him on: ExcessionEvent.com
