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What Microsoft's LinkedIn Acquisition Could Mean for UC

July 01, 2016

When the news broke that Microsoft (News - Alert) is spending $26 billion on business social networking site LinkedIn, a lot of people wondered “why” and “what now?”  It’s a bit understandable that some investors might be wary. It’s only been a year since Microsoft’s dud acquisition of Nokia, which led to a $7.6 billion write-down.

In a recent conference call with investors, however, Microsoft CEO Satya Nadella (News - Alert) said that the LinkedIn acquisition will be different. For starters, Microsoft plans to let LinkedIn operate independently as a wholly owned subsidiary, like Instagram and WhatsApp are to Facebook (News - Alert). Once the acquisition is complete, LinkedIn will be a part of Microsoft's Commercial Cloud business unit, which includes crucial and fast-growing internet-based business products like Dynamics CRM and the Azure cloud platform, according to Business Insider. Experts generally agree LinkedIn’s biggest value will be in the technology and product lines for HR departments and recruiters that will be of the biggest value to Microsoft.

There are also unified communications technology implications, however. Microsoft transformed its enterprise communications technology several years ago with the acquisition of Skype, which led to the launch of Skype for Business. LinkedIn, of course, is the world’s leading database network for working professionals, so the dynamics could be very positive if the integration is handled properly, according to a recent blog post by Darlene Jackson of ISI (News - Alert) Telemanagement Inc.

“LinkedIn gives up to the minute news through its feed which compares well to Facebook’s,” she wrote. “Topping over 433 million users, LinkedIn has one of the most dynamic networks around. Many professionals utilize the social channel to share news, accomplishments, ideas, and find employment through the LinkedIn network. With 45 billion page views in the first quarter of 2016 and two new LinkedIn members per second, the staggering usage presents a spectacular opportunity to advance the Microsoft brand should they acquire the networking site.

Ultimately, according to Jackson, the acquisition offers an opportunity for a real-time cloud-based unified communications (UC) suite for enterprises once Microsoft becomes able to integrate this real-time capability into its existing cloud-based UC suite for the enterprise.

“The UC tools that Microsoft already has combined into their communications suite lets users access many collaborative tools like email, group chat, voice, and text under one umbrella/address,” wrote Jackson. “The integration of voice, data, and video is attractive to small and large businesses alike. One platform for all workflow (IM, scheduling, file sharing) on multiple devices from the wearable to the desktop is the caveat. If the acquisition takes place, Microsoft will have a captive audience since many LinkedIn users are business owners.”

We may see Microsoft begin to lean toward offering unified communications as a service (UCaaS) and other enterprise communications solutions. The bundling of Microsoft’s UC products like Sharepoint, Skype for Business, and Office 365 could become a pivotal business framework for LinkedIn’s millions of users IF the acquisition is handled properly. The UCaaS market has a lot of aspiring visionaries (to speak in Gartner (News - Alert) language) already, so Microsoft will have its work cut out for it if it wants to elbow its way in. While it may have the cash to do so, a high-profile name won’t necessarily be enough for success.

Edited by Stefania Viscusi

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