Cloud meets network

Failed mergers cast shadow over Microsoft-LinkedIn

Though you could argue with the 49.5% premium, given Microsoft’s mixed luck with mergers/ takeovers such as the one with No ki a, the $26.2billion being spent on acquiring LinkedIn probably makes the most sense on the face of things. Though Microsoft has 1.2 billion Office users—Linked In has over 400 million professional son its network—it has been losing relevance for a variety of reasons, many of which are related to what is called the power of the network. Facebook has 1.65 billion users, has already become one of the preferred sources of news globally, and is now trying to enter the office arena with Facebook at Work. Google’s success is legendary, though Google+ is a poor cousin of Facebook, its slew of free apps/ products can do much of what Office can do. Which is why, while talking of the synergies in the deal to his team, Microsoft CEO Sat ya Na della talked of the deal bringing together‘ the world’ s leading professional cloud with the world’s leading professional network’.

The cross-selling possibilities apart, the potential synergies are huge. Na della spoke of a Linked In news feed—that’ s a powerful rival to the stories available on Facebook or other networks—serving up an article based on the project you are working on while Office suggests an expert to connect via LinkedIn to help with a task. Linking LinkedIn with Calendar, to cite another possibility, can provide you professional information on a person you are just about to meet, or even news stories. Add in Cortana to the mix, to let it trawl through the LinkedIn database of CVs and stories, and you are talking of a potential force multiplier. In essence, as Microsoft tries to up its game in the enterprise space—apart from Outlook, it has Skype, cloud computing platform Azure and CRM/ERP solutions from Dynamics—it needs a social network to leverage; that is what LinkedIn provides along with an online teaching assistant Lynda that can help companies transition their employees to higher skills. Whether the integration will be successful, of course, will be critical—indeed, most M&As that fail do so on this front—and that is why Nadella has decided that Jeff Weiner will remain Linked In CEO and will‘ decide from there what makes sense to integrate and what does not ’. All eyes will now be on Kurt Del Bene, Qi Lu and Scott Guthrie who are to drive the integration effort.