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Will Microsoft’s Big Bet on B2B Social Media Pay Off?

Okay, you’ve read countless opinion pieces on the blockbuster deal where Microsoft paid a notable (nearly 9x) premium for LinkedIn.

One could argue that it’s about time someone snatched up LinkedIn…that was my initial reaction, and perhaps yours too.  But why Microsoft, and why now? Well, it should be obvious that this is a B2B play. In fact, our own Melissa Parrish eloquently outlined the minimal relevance to B2C firms in her blog post.

However, Melissa and several other colleagues here at Forrester published our quick take on what this deal really means. It breaks down to 3 fundamental things:

  • Data. As today’s marketing tech goes, Microsoft lags significantly in two areas: customer identity management and proprietary data assets. LinkedIn solves that problem by integrating 433 million LinkedIn profiles. Microsoft will get its hands on data about how those individuals use products like Office 365, email, and Skype.
  • CRM. Microsoft is clearly firing a shot across the bow of Salesforce. In the CRM space, Dynamics has some traction in the enterprise, but it has traditionally been an alternative for small and medium-size businesses requiring more accessible price points than Salesforce commands.
  • Collaboration. That same shot can also be heard by Facebook and Google. This acquisition bolsters Microsoft’s productivity and collaboration tool capabilities. How? With deep access to the LinkedIn social graph, Microsoft will be able to power new capabilities for accelerating work and collaboration across an employee’s personal connections inside and outside the firm.

That’s all potential upside for Microsoft. But this marriage isn’t without risk. There are some very real and lingering questions about LinkedIn’s competencies around security, and privacy. These are challenges Microsoft will have to overcome if they are to successfully leverage this acquisition for enterprise scale CRM and collaboration. Forrester clients can get the full picture by reading the full report here.


Carlton-DotyCarlton A. Doty is VP and group director at Forrester Research, serving customer insights professionals. Read more Forrester blogs here.

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