When Satya Nadella visited India to earmark the 25 years of operations in the country last November, his keynote provided a deep dive on Microsoft’s new mission “Empowering every person and organization on the planet to achieve more,” and what will it mean mainly for the enterprise customers.
And this is the first of what Nadella’s ambitious plans are. Microsoft’s acquisition of LinkedIn Corp. for $26.2 billion not only reflects new horizons for both the companies, but also reflects Microsoft’s commitment to bet on how a layer of data from professional social network can transform current enterprise services. Nadella, through this acquisition has aspired to lead workplace transformation for the future and offer tools, apps, technologies that employees and leaders would want to use at the workplace. Not only is this move seen to strengthen Microsoft’s bottom-line but it also aims to cushion its position in the market.
“It’s really the coming together of the professional cloud and the professional network,” Mr. Nadella stated in an interview.
At People Matters, we keep following the industry trends and its impact on people excellence and HR. I am excited about how this deal is going to provide further value to business and HR leaders to enhance workplace productivity and engagement. This deal could bring more opportunities for companies to increase empowerment, productivity of individuals and teams, enabling collaboration in the workplace. Here is how:
- It is a data game, after all: As controversial as it can be, all LinkedIn data on companies and employees can be turned into a knowledge base for all enterprise tools, including HR. Where Facebook was 2 years ago when it acquired WhatsApp for $18.4bn for its data, Microsoft is at the same helm today. With Nadella offering to give its Cortana digital assistant access to data from LinkedIn, HR can tomorrow, potentially, use Cortana to prep for interviews, get support from data in terms of references, and skills about a candidate. Cortana, a Siri-like assistant, will be able to provide information on candidates or even employees and their networks that can be very useful for HR fraternity to enhance the “humanness” of relations and the “emotional connect.
- Richer usage of Microsoft services: Microsoft will be able to integrate data with tools and app to provide superior services. Integrating LinkedIn with tools like Skype, Office, CRM, HRMS and other services run on, Microsoft's Azure platform is Nadella’s overarching vision of providing unparalleled software offerings.
- Counter attack at Facebook at Work and other collaboration tools: The more competition, the better for the buyer. Facebook has been investing heavily in building a corporate-like network for employers. In India, many organizations, Like Godrej, Piramal, are already using Facebook at Work. Microsoft plans to integrate LinkedIn newsfeed into the Office 365, that will mean users can keep track of what’s happening in their professional network while they are working. That will mean great value for their enterprise customers as companies already use MSOffice, which dilutes the need to move to Facebook at work when Office would provide a “Facebook-like” built in?
- An edge to current leaders in the HRMS space? The leverage that Microsoft can gain in their human-resources management software can be a threat for current players like SAP Successfactors, Oracle Taleo and Fusion suites, Cornestone on Demand, IBM Kenexa and others in this space. Microsoft could make LinkedIn profile as the default identity/bio for an individual across apps and devices for companies as well as default profile in the context of the enterprise. Microsoft could integrate LinkedIn data to build predictability on talent decisions and could provide a far more superior service for both recruiters and talent management leaders. The TechHR space in India is growing very rapidly - the Rs. 2,000 crores segment is seeing a double digit growth for the last 3 years. The 2015 People Matters TechHR Study revealed that companies in India will continue to increase their investments in technology: As many as 6 out of 10 respondents shared that their budget in HR technology is going to increase. The functions that will see the highest investment will be HR Analytics (72 per cent), Recruitment Technology (69 per cent), L&D Technology (69 per cent), and bringing mobility across the HR processes (65 per cent).
Of course all these opportunities will need to materialize. Finding theoretical synergies and benefits to corporates, in this case to HR too, is one thing. The proof of the pudding is as always in the implementation and execution. The past record of Microsoft’s inability to integrate and derive value from previous acquisitions, from Nokia to aQuantive, or even Yammer, make analysts raise questions on how successfully Microsoft can implement and execute this deal. But this is Nadella's first acquisition in his tenure and it seems in alignment with his new strategy and the vision of the organization – a vision that is ambitious and provides a huge opportunity to both organizations.