Will Microsoft’s Acquisition of LinkedIn Change the WebRTC Landscape?

June 14, 2016

It’s good to have Fippo when there’s lack of ideas in your head.

While there are synergies abound, a flawless execution is necessary
While there are synergies abound, a flawless execution is necessary

Yap. Fippo again prodded me about a topic, so here comes the post for it.

If you missed it, yesterday Microsoft acquired LinkedIn. $26.2B.

In some ways, Microsoft now rules the enterprise space – communication, collaboration and creation:

  • Microsoft Office suite (Excel, PowerPoint and Word as the main pillars)
  • Microsoft Outlook and the Exchange server (Email)
  • Yammer (Enterprise communications)
  • Skype (Voice and video communications)
  • LinkedIn (User identities and profiles)

Dean Bubley puts it nicely:

There’s a longform here, but I am less convinced.

I am more inclined to how Radio Free Mobile sees this:

However, for all of this to work, LinkedIn’s systems and data has to become deeply integrated with those of Microsoft which with the companies remaining independent, will be orders of magnitude more difficult.

Microsoft of late has an issue with the ability to execute and follow through.

Skype, while huge, isn’t growing since Microsoft’s acquisition. It is actually letting others take its place.

Same with Yammer. Have you heard anything about it in the last few years? The news is all about Slack, and worse still – it is about how Atlassian’s HipChat is struggling because of Slack – Yammer isn’t even mentioned as a competitor/contender in this space.

Which brings us to LinkedIn, Microsoft’s intents for it and its ability and willingness to follow through.

Back to LinkedIn

I wrote about LinkedIn exactly a year ago. It was about their acquisition at the time of Lynda, a learning company, and me griping on why LinkedIn isn’t doing anything about comms (and WebRTC).

The people at LinkedIn aren’t stupid. They are $26.2B smarter than I am. And frankly, that’s also $17.7B smarter than Skype.

What does that tell us?

  • LinkedIn saw no real value in real time communications
    • Not enough to invest in it and build something with WebRTC
    • Not enough to acquire someone outright
    • Not enough to partner and integrate someone like Skype (Facebook did that in the past for example)
  • That decision played well for LinkedIn – they just got acquired
  • Messaging isn’t that important to LinkedIn either
    • They have rudimentary messaging capability in their platform
    • But it is lacking in so many ways that it is hard to enumerate them
    • And you can’t call its messaging anything similar to… messaging. If feels more like emails

If LinkedIn can’t find value in real time communications for its platform on its own, can Microsoft do a better job at it?

I don’t know.

Now lets look at the Microsoft assets that canbe integrated with LinkedIn.

Skype and LinkedIn

As Dean suggested, there is some synergy in Skype connecting to LinkedIn.

LinkedIn can slap a Skype button on its profiles, making it easy to connect to the people you’re connected with on LinkedIn.

While that’s great, most communication today happens OUTSIDE of LinkedIn. You reach out to people on it, connect with them, and then shift to email and other means of communications. Especially once you know a person to some extent.

To make a point – I wouldn’t send a message to Dean over LinkedIn – I’ll make it over email. Or just ping him on Skype, because that’s where he is.

When someone asks me for an introduction, it usually goes like this: “I saw you are connected to John Doe on LinkedIn. Can you send an intro email for me?”. It happens a lot less on LinkedIn even when it is driven from LinkedIn.

Getting the communication back to LinkedIn will be hard. Getting slightly more communications from LinkedIn directly to Skype is possible, though I am not sure it will be widely accepted.

Yammer and LinkedIn

Yammer isn’t best of breed in enterprise messaging. Not even sure if doing anything with it and LinkedIn is worth the effort.

My suggestion is to open the coffers and take out a few more billions of dollars and acquire Slack. Then throw out all voice integrations and bolt Skype in there. But that has nothing to do with LinkedIn.

Outlook/Exchange and LinkedIn

Email is what drives LinkedIn in the most effective way.

Having the ability to embed and merge profiles properly into Outlook – without any ugly add-ons – that’s great.

But nothing earth shattering that we haven’t seen before with Rapportive on Gmail.

Office and LinkedIn

I guess that having a tighter integration between PowerPoint and Slideshare would be great. But that isn’t the reason LinkedIn was acquired.

Sarah Perez of TechCrunch wrote about the integration of Office and LinkedIn. It includes Outlook. Focuses on Outlook.

And mostly goes one-way: how LinkedIn can enrich Office/Outlook related information. A bit on how Office can enrich LinkedIn data by adding more users. But nothing about how LinkedIn’s functionality can grow. A shame.

If this is where things are headed – growing Office but not growing LinkedIn, then I am afraid LinkedIn is expecting a similar fate to Yammer and Skype. Its days of greatness will be behind it and its level of innovation and introduction of powerful features that can compete in the market – will come to an end.

Other Domains

Cortana and Microsoft’s CRM are areas I missed. You can read more about them in Richard’s analysis on Radio Free Mobile.

The Corporate Structure

It seems that LinkedIn will sit as an independent entity within Microsoft under Satya Nadella directly.

I wonder how that will make things easy for the tight integrations envisioned for LinkedIn and the rest of Microsoft’s assets. How easy will it get to get the Skype team to cooperate and assist the LinkedIn team to integrate Skype for Web? What will the Office team want in return for the data they will be passing to LinkedIn? Will legal even authorize it?

There will be a lot of coordination taking place here, and I do hope that along the way, they won’t lose what’s needed to be done – there’s a lot of synergies and power here, but this will require a lot of agility from a huge company.

Back to WebRTC

This affects larger players in the UC space. If (and that’s a big if) Microsoft can connect the dots of Office, Exchange, Skype and LinkedIn – this makes for a very compelling offering. One that can differentiate and top Cisco and Google.

If Microsoft can make LinkedIn into the congregation point of people across enterprises – and not only a place to find CVs – it will be in a position to expand its offering towards real time communications in ways that others will find hard to compete against. LinkedIn lacked this vision. I wonder if Microsoft can follow through – or will they as well see it as unnecessary.

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  1. Platforms are the dominant business model. As you have outlined above, Microsoft is essentially an Enterprise platform. Given that, do you see a scenario where LinkedIn morphs into something like Slack, with a public component (effectively LinkedIn as is today), and a private component which could look more like Slack? As Bubley points out, you’d be hard pressed to find a more universal tool (save for telephony and email) for finding someone (from a business perspective)…..could this not offer a unique value proposition for team collaboration, especially when team members are outside the enterprise?

    1. The issue isn’t in the synergy – it definitely exist.

      The issue is in the capacity of both Microsoft and LinkedIn to execute in an area they are both weak at – enterprise messaging. Neither of them have the capability of Whatsapp (or even Slack) when it comes to push notifications – let alone full fledged group messaging that users will love to use…

  2. Good post Tsahi. as usual. Great simplified analysis. This will be a big challenge for Microsoft to get an ROI for the huge investment. I believe the integration of the platforms is critical and can change the game in Enterprise to SMB markets at both the customer and individual level. Lot of heavy lifting required BUT why not thread these together … end game = use O365, click to see the presence of an employee, friend or federated partner. Nail up a IM session, click to call, escalate to video, share docs and add others & collaborate. Ok, I got carried away… BUT at $26B, I’m not the only one dreaming 🙂

  3. The problem with LinkedIN is that for an average person it is a directory of connections, not a tool to make more connections. As long as they hold on to the premium model, which is generating almost no revenue, for normal people when they want to look for connections, LinkedIN will keep failing. Also, using email as a primary notification channel is simply outdated.

    LinkedIn should concentrate on making networking for normal people as easy as possible, and make sure businesses can use it as a recruitment channel. Anything other changes can complement the big change they need make happen.

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