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Microsoft-LinkedIn - How will it impact customers, competitors and partners?

James Henderson (ARN) | June 16, 2016
Top three questions answered as Redmond prepares to acquire social media giant.

"If they feel that they are being turned into product without getting a personal return, then they will leave and the capital spent on the deal and all opportunity is lost."

To be blunt, this is a huge challenge for Microsoft, who successfully built its consumer Xbox membership, but as Williams warned, the LinkedIn community is a different and more sensitive group.

Implications to competitors

For Williams, person-based data represents a premium, with each of the large software vendors racing to build out effective data-economies.

Consequently, CRM vendors such as Salesforce, SAP, Oracle and IBM are partnering with Facebook to gain access to its consumer-level personal profile data, whole Adobe is building an open data consortium that opts-in consumers across a collective of brands.

Furthermore, Salesforce previously made multiple acquisitions to build out its enterprise data portfolio, adding Jigsaw for corporate profile data, Dimdim for conferencing and Manymoon for content development.

Delving deeper, Google built its Google+ circles, but has failed to attract millions of subscribers, with IBM acquiring The Weather Company.

"Accessing personal data is different than accessing machine data in that people need to offer, participate and maintain the data," Williams explained.

Williams said firms such as Slack - a cloud-based collaboration tool - are winning enterprise share since the network effect is easier to apply within the bounds of a business than across the global population.

As explained by Williams, building and maintaining a professional membership site requires securing personal information as well as needing to add business value.

"The skills are specialised and valuable - hence the premium paid for LinkedIn," he added. "It is a never-ending task Microsoft will own.

"Once the acquisition closes, Microsoft will have 433 million new relationships to manage - and if it can pull off this trick - it will have stolen a march on all of its competitors except Facebook."

Implications to partners

Previously, LinkedIn has either gone directly to subscribers or sold directly through its internal sales team which stands tall as a big change for Microsoft, who primarily works through partners.

While LinkedIn will operate as its own unit, Williams expects that multiple new pathways will open up for monetisation.

"Two direct pathways are, firstly, gaining access to LinkedIn data while not being a member, is a possibility - at the risk of angering members; and secondly, selling access to members for new productivity, sales and educational applications is a clear pathway," he said.

Going forward, William believes partners, especially systems integration partners, will want to access the LinkedIn API in order to pull information into Dynamics and other applications.

"Microsoft should be wary about the use of member information," he cautioned. "LinkedIn has been careful, but at the cost of becoming closed off from the application of the data.

 

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