Microsoft's Aussie partners judge 'surprise' LinkedIn deal

Microsoft's Australian partners are excited to see how the software giant can unite LinkedIn with products such as Office and Dynamics CRM – as long as it can integrate the social network effectively.

The deal was announced overnight, with Microsoft paying US$26.2 billion to snap up the business social network, which boasts 433 million users.

Gartner research vice president Brian Blau told CRN he had been surprised by the news. "I have not previously considered those two combining forces."

According to Blau, LinkedIn's last quarter was its worst with the company's stocks falling 46.5 percent, the lowest since it went public in 2011. He speculated what role that played in the sale. "I still wonder the motivation on LinkedIn's side."

According to official statements, LinkedIn will maintain its independence but Blau pointed out "they say they won't change – until they decide to change".

LinkedIn isn't Microsoft's first foray into social media – it acquired Yammer in June 2012 for $US1.2 billion. Blau said Microsoft's attempts to integrate Yammer hadn't been as successful as Microsoft hoped.

He added that it was hard to see a downside for Microsoft, even with the US$26 billion invested in the acquisition. Blau pointed to Salesforce as the competitor with the greatest to lose from the deal.

Despite their rivalry in the CRM space, Microsoft and Salesforce struck up a partnership in 2014. Last year, it was reported that Microsoft offered US$55 billion to acquire Salesforce, but Marc Benioff wanted US$70 billion.

Gartner's Blau added that outside of Xbox, Microsoft hasn't done too well with consumers lately and LinkedIn will bring "data that does not exist anywhere else" to help with that.

Announcing the deal, Microsoft chief executive Satya Nadella said: "Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organisation on the planet."

Australian partners speak

Michael Pascoe, managing director of Melbourne-based Olikka, said this was likely to be a long-term play from Microsoft. "If you think of the companies they could have acquired for less, it makes me think that there is a long vision to this."

Pascoe believes LinkedIn will mean drive better content creation and collaboration, especially with Office 365 and Skype for Business.

He also saw a potential for selling data – but offered a word of caution. "There is a potential integration but they have to be delicate about it. There are concerns for people. When do you cross the line between what is data insight and just being creepy [in the data that you sell]."

Chris Greatrex, managing director of Sydney-based Artis Group, was thrilled because his company provides Microsoft Dynamics CRM, Office 365 and ClickDimensions marketing automation implementation. "We are excited to see what integrations will be announced between the products.

"LinkedIn plays on major role in our content and pull marketing strategy. We use LinkedIn Pulse as a way to build and reconnect with a peer network looking for honest information based on experience rather than a hard sell direct from the brand," Greatrex added.

In terms of competition in the CRM space, Greatrex said Artis Group already had some runs on the board pitching Dynamics against Salesforce, especially in government.

Greatrex added that there was space to integrate Yammer with LinkedIn Groups and also add Skype for Business for interviews.

Andy Neumann, a veteran of the Microsoft channel and now chief executive of recently launched partner Sensei Project Solutions, was excited about the opportunities for partners. "I am really impressed and looking forward to see an integration with Dynamics, Office and LinkedIn. To me, the acquisition makes total sense."

Neumann didn't expect immediate changes, saying it will take some time for Microsoft to understand how valuable its new business could be.

"I wonder how Salesforce will feel about this. This puts Microsoft into such a strong position. I can't wait to see this evolve productivity."

Under the terms of the deal, LinkedIn will maintain its brand, culture and independence and Jeff Weiner will continue to be the chief executive. The LinkedIn board has agreed unanimously to the deal and the transaction is expected to close by December.