By now pretty much everyone on the planet knows that Microsoft have spent $26.2 billion to acquire LinkedIn, which seems like an awful lot of money. While it’s an orders of magnitude higher than Salesforce’s acquisition of Demandware, the premium percentages are similar, with Salesforce paying a 56% over the share price and Microsoft paying around 50% over. Reaction to this has been across the spectrum from waste of money to perfectly executed play for world domination, with quite a lot of bemusement in the middle.
One type of reaction that did surprise me was that the deal was done to compete with Salesforce, and that Salesforce should be worried. Is it really the case that the only thing stopping customers from choosing Microsoft’s cloud offering over Salesforce was the fact that Microsoft didn’t own the LinkedIn data that both systems could access on demand?
Its not just CRM
I’d expect this deal to give Microsoft the upper hand when it comes to social selling capability, and its also going to be a bonus around the concept of a 360 degree view of your customer — maybe there’s value in knowing when you head into a meeting that both you and one of the customer execs worked with the same person back in the day, maybe not if there’s some bad blood between them that isn’t mentioned in the employment history!
Looking at Microsoft’s presentation, one item that I’m surprised they aren’t making more of is recruitment, an area which LinkedIn have monetised well. Many companies use a premium account to be able to identify and reach out to candidates, and I can easily imagine a killer app that ties together vacancies and candidates based on the kind of insights that could be found in this data.
Salesforce is about more than CRM though — in addition to the myriad business application clouds, soon to be augmented by the commerce cloud with the Demandware acquisition no doubt, there is the platform — the sweet spot for employee facing applications in the enterprise. When you buy a Sales Cloud license, for example, not only do you get access to the CRM/Sales functionality, but you also get access to the platform which allows you to build your own custom applications which may not be in any way related to CRM or Sales.
So will Salesforce be worried about this move by Microsoft? I don’t think that worried is the right word, as its not like this is a game changer right now. I’m sure its not their most favoured outcome, and I’d imagine they’ll be closely monitoring what Microsoft does with LinkedIn over the coming years, but I’m sure that’s the case with all of their larger competitors. Microsoft don’t have a stellar record on acquisitions (Nokia anyone?), but this one looks like a good fit and I can’t see it going wrong unless it gets strangled by internal politics or the like, and Satya Nadella has already said they are planning to take a hands off approach.
What is clear is that we are very much in a buying cycle — the major cloud players are all buying as well as building to increase their market and a deal of this magnitude will spark some further activity I’d imagine.
What the World is Saying
Clearly the above is just my opinion (if that!) and I don’t work for Microsoft or Salesforce, nor do I have any additional information over and above what is in the news. Here’s a selection of links from people who may know what they are talking about:
- Business Insider
- The New Yorker
- Forbes — positive
- Forbes — negative
- Ars Technica — bemused!
- The Register — snarky, as always, and apocalyptic (I love El Reg!)
- Tech Crunch
I’m better known in the Salesforce community as Bob Buzzard — 10 x Certified, including Technical Architect, 5 x MVP and CTO of BrightGen, a Platinum Cloud Alliance Partner in the United Kingdom.
You can find my (usually) more technical thoughts at the Bob Buzzard Blog