Microsoft LinkedIn Deal May Force Facebook and Salesforce Together

Jun 15, 2016

Microsoft's (MSFT) $26 billion acquisition of LinkedIn has the potential of giving Microsoft Dynamics CRM a powerful leg-up on Salesforce (and on Oracle and SAP). The deal provides Microsoft with a large user base from a familiar brand; one that recruiters and salespeople rely on for applicant and prospect intelligence and leads.  LinkedIn has been a "neutral" party for competing CRM and sales solutions, but with LinkedIn housed in MSFT other sales/CRM vendors (eg Salesforce) may be wary of it.  

My colleague Mike Jude correctly points out that the LinkedIn deal is only one move in a game where Microsoft, like Google and Facebook (FB), are attempting to assemble a compelling enterprise play. This includes Web based services, communications, content, social media, search, and productivity applications.  Google is actually farther down this path and has assembled a similar portfolio.

MSFT also obtains HR/HCM market capabilities with LinkedIn’s under-tapped talent management capability.  However, it still needs powerful HRIS/HRMS (payroll, benefits, and time and attendance) to create a one-stop shopping application to compete with the likes of Infor, Oracle, and SAP. As a recent Frost & Sullivan Market Insight, “Maximizing the Human Resource” notes, growing skilled talent needs, looming shrinking workforces, the rise of on-demand and “talent anywhere”, as well as changing worker expectations are creating markets for compelling cloud solutions.

However, it remains to be seen how well and quickly Microsoft will absorb LinkedIn into its hand. For instance, I am not impressed with how Microsoft has utilized Skype and Skype for Business and its object RTC (ORTC) iteration of WebRTC, despite its potential (discussed in a Frost & Sullivan Market Insight on WebRTC). There are more WebRTC-enabled contact center/customer service applications being deployed, but Microsoft is not part of them.

That being said, the longer it takes to add synergies to Dynamics and other MSFT applications from LinkedIn, the more lead time competitors, notably Salesforce (SFDC), will be able to respond with competing value propositions. Moreover, LinkedIn is becoming a "mature" site: it is not as actionable as it can be.  Unlike some competing sites, there is not the content on it that would prompt individuals to visit for long periods of time and to use it. 

Of the other social sites with which CRM/sales solutions vendors SFDC (and Oracle) can partner: several have the same cachets and similar user bases as LinkedIn.  Facebook is at the top of the list as it provides a more compelling value case as its mobile-friendly platform can handle more content (eg resumes) and enable longer posts.  More to the point, FB provides a one-stop social shop for personal social interaction, including work and career search. While businesses do not generally allow employees to go on FB, this control is being obviated by employees using their personal smartphones and tablets to access it.  In time, pressured by this consumerization of IT, businesses will allow FB on their employees' workstations.

At the same time Facebook has made no secret of its wish to be a credible major business market participant.  The Frost & Sullivan Market Insight, “Refining Social Media Marketing Strategies”, points to its “Buy” call-to-action social selling button while an earlier Frost & Sullivan post discusses its Businesses on Messenger customer service play as two examples, with Facebook at Work being another.

Nevertheless, the fastest route for FB to the C-suite may be with a strong B2B partner and SFDC could fit the bill culturally and product-wise. FB and SFDC have partnered before (eg between Parse and Heroku). Extending this collaboration to cover the kinds of functions that LinkedIn provides, backed by SFDC's CRM engine, could in fact, give FB at last the respectability it needs inside businesses.  Both companies have some overlap (Chatter, Facebook at Work) that they can work out.

A SFDC FB combination could be a powerful competitor to MSFT LinkedIn with the bonus of a cachet that would be more appealing than a more stodgy MSFT and LinkedIn offering. Ultimately, FB has the resources to help SFDC make more strategic acquisitions and devise added solutions to bolster its HR/HCM and voice communications capabilities that together can provide a truly compelling enterprise product suite.


Brendan Read

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Brendan Read is Senior Industry Analyst with over 25 years’ experience covering business, communications, staffing, and technology. He has worked in, prepared reports, and blogged on a wide range of topics including customer contact, CX, CRM, IoT, social media, supply chain, and BC/DR. He also has backgrounds in construction, manufacturing, materials, resource extraction, site selection, and transportation. He examines the broad economic, environmental, innovation, political, and social mega trends, and their impacts on businesses, markets, and society.


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