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The dust has settled: The impact of Microsoft's acquisition of Linkedin

Today marks a full week after the announcement that Microsoft acquired Linkedin. There has been a lot of discussion around this move on whether this is another genius move from Satya Nadella, or it was actually yet another failed-to-be corporate acquisition. The stock market believes in latter. Hell, Moody has placed Microsoft's "AAA" rating under review for downgrade following the deal announcement! As per usual, they’re incredibly wrong.

This is the biggest B2B acquisition of all time, so there is no denying that it will impact our industry in many different ways. I’ll leave for the market geeks to decide if it was too expensive or cheap, but there are a couple of interesting things to notice:

linkedinmsft2.0.pngImage credit: The Verge

 

Who are the winners and losers?

A good number of reporters agree that this move from Microsoft might be a fantastic product acquisition for Microsoft Dynamics CRM, to provide the most comprehensive, dynamic lead enrichment possible using the auto-updating details of 400M users. Check this post by James Allworth on this.

On a short-term view, you might think that all lead enrichment startups, and there are many, will suffer massively from this move, and it’s true - if they don’t improve their product in the next 1-2 years, which is 5 years in startup-time. This product integration will not be overnight.


Dynamics CRM

The Operating System of modern companies is not MacOS, certainly not Windows and sadly for me, not Ubuntu. It’s their CRM. This is why this acquisition positions Microsoft in a much better light for future iterations of Dynamics CRM.


Other opportunities arise

So now that we know that lead enrichment might be a core feature of Dynamics, it might seem a bit scary for some startups. Fortunately, entrepreneurs are trained to find opportunities instead of problems, so here’s my take - Microsoft will continue to invest in being self-enclosed, just like Salesforce.

Yes, they have API access and many successful startups around their platform, but there is a clear interest by both companies in internalizing all experiences that enhance their CRMs.


So what can your product do? There is a lot of external data that live outside these CRMs. That’s option number one (And the one that Attentive is following). Option two is to make your users generate data as they use your product, like a project management software where users have to input many things, and therefore your intrinsic value is not tied to a CRM vendor. I believe that while you should pick one of the options in the short-term, you have to have a hybrid model of data to reach a significant market position, so you have to have that in mind straight right now.


Bottom-line, this move by Microsoft is a great one by Satya Nadella and his team, a potential great product integration (albeit very difficult to implement and will certainly take a long time) and also provides many SaaS / Enterprise folks with liquidity - read: a lot of new rich people - which some will invest back into the ecosystem. And that is good for all of us.
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