Microsoft to go after Salesforce and Oracle using LinkedIn data

For its users, LinkedIn can be a valuable professional networking tool for making connections and keeping informed. For Microsoft, which bought LinkedIn for $26 billion last year, the business-connections platform has now become a weapon against San Francisco sales-software giant Salesforce and Redwood City business-software behemoth Oracle.

If Microsoft’s bid succeeds, that will go a long way toward validating what some critics had called a bad acquisition:

“While the deal certainly rescues LinkedIn from a huge growth problem that slashed the value of its shares in February, it is unclear how Microsoft will generate a return on that $26.2 billion investment,” a Forbes article said shortly after announcement of the sale.

That article focused on LinkedIn’s finances and its potential for growth as a professional networking site. As such, it was a fairly sound critique.

But it didn’t address a LinkedIn asset — data — that Redmond, Washington-based Microsoft has just revealed it plans to leverage in a bid to grab market share from Salesforce.

TJ Kiett, a senior analyst with research firm Forrester, saw the value for that asset.

“This is a data play in many respects,” Kiett told USA Today. “In the enterprise market, Microsoft wants to create a new platform for work that makes it easier for employees to collaborate and get things done.

“LinkedIn, with its profiles, groups and connections, is ideal.”

Probably so — Microsoft CEO Satya Nadella has said his firm’s Office 365 productivity platform is a key focus. But Nadella has big plans for LinkedIn’s data beyond what might be done with a collaboration platform.

Microsoft this summer will roll out upgrades to its Dynamics 365 sales software that integrate LinkedIn data, Reuters reported April 24.

Nadella told the news service the initiative was “central to the company’s long-term strategy for building specialized business software.”

The upgrades represent the first major product initiative to arise from the LinkedIn purchase, according to Reuters.

New features of Dynamics 365 “will comb through a salesperson’s email, calendar and LinkedIn relationships to help gauge how warm their relationship is with a potential customer,” Reuters reported.

Also, “the system will recommend ways to save an at-risk deal, like calling in a co-worker who is connected to the potential customer on LinkedIn.”

For Microsoft, the move is a bid to extend its dominance in operating systems and productivity software into sales software, where it’s far behind Salesforce, Redwood City’s Oracle and German tech titan SAP, according to Reuters.

Research firm Gartner has reported that Microsoft in 2015 had only 4.3 percent of the $26.3 billion sales software market, in which Salesforce had 19.7 percent, SAP had 10.2 percent and Oracle had 7.8 percent.

Nadella told Reuters that artificial intelligence would be central to the upgraded Dynamics 365, and that specialized software for sales and finance were crucial for Microsoft’s future.

“Nadella is under pressure to show that the pricey LinkedIn acquisition in mid-2016 was worthwhile,” according to Reuters.

 

Photo: Microsoft CEO Saya Nadella in 2013 (Wikimedia Commons/LeWeb14)

 

 

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