Big news today in the technology space. Microsoft will buy popular business networking company, LinkedIn for $26.2 Billion, making it one of the largest technology acquisitions in history. It’s also Microsoft’s largest acquisition ever.
Microsoft says LinkedIn, which has 433 million users, will retain its brand, culture and CEO after the sale. (The transaction has already been approved by both boards, but it must still get regulatory and other approvals.) LinkedIn will become a part of Microsoft’s productivity and business processes segment.
What’s In It For Microsoft?
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This acquisition is in line with a trend set by CEO Satya Nadella, who led Microsoft to purchase email app newcomer Acompli in 2014. Microsoft shortly thereafter replaced its own mobile email with that of Accompli.
Enhancing Office Productivity
Nadella has called Microsoft a “productivity and platform company for a mobile first and cloud-first world.” The company is trying to solidify and protect its hold on the office technology market, helping it to compete against companies like Salesforce. It will also give Microsoft something business users want: social networking services and professional content.
Social Graph for CRM
Microsoft can use LinkedIn’s social graph as a sales tool within its existing CRM products. You can be logged into Microsoft’s Dynamics and instantly get data from LinkedIn’s Sales Navigator “to transform the sales cycle with actionable insights” — essentially lots of background information about users that can help find leads, open conversations and close deals.
Help Customers Move to the Cloud
This is also a huge cloud play. Cloud spending in 2015 reached $175 billion and is projected to top $315 billion by 2019, according to Gartner. For Microsoft, acquiring LinkedIn helps to further position them to serve customers who want to move software, content and data to the cloud.
What’s In It For LinkedIn?
New Features and Functionality
LinkedIn will now have more resources at their disposable to try new things. And the massive amounts of data in these 433 million users’ professional profiles will potentially someday integrate with the tools they’re using daily for office productivity and collaboration.
“In a presentation, Microsoft showed how a member’s LinkedIn profile would be at the center of other Microsoft-centric aspects of daily work life using products such as Outlook, Excel and Skype. Microsoft plans to link the professional network with its digital assistant Cortana and its customer relationship software”.
Microsoft’s LinkedIn buy escalates cloud wars, Jessica Guynn, USA Today, June 13, 2016