by Andy
June 13, 2016
How’s that for a mega deal? It must be nice to have $26.2B in cash! Apple could have amassed 10x that. So why Microsoft?
Like many, I sit before my Mac Pro while my iPhone charges and write this blog using Word. Outlook manages my email and calendars. PowerPoint and Excel are my business tools of choice. Chrome is my browser. Google is my search engine. Facebook and Linked-In are my personal and professional social platforms. I’ve cobbled together a digital system that meets my needs – each with its own reputation and brand personality.
The most revered of these brands is Apple. Bill Gates has not inspired multiple movies starring A-listers (nor Reid Hoffman, Linked-In’s founder). Apple enjoys all the headlines, extreme passion and loyalty. Countless books and case studies regale Apple’s history. Even dogmatic analysts prefer it to Microsoft – odd because Apple’s stock has been down over the last year while Microsoft has been up. As a father of two teen-age daughters, I know Apple’s future is bright as a new iPhone is the ultimate reward for straight As. Leila just got her new 6s. Campbell, sadly, will have to work harder – and she will.
Regarding Linked-In, prospective job applicants and business intellects are younger with more social-friendly habits. If my daughters are any indication, tomorrow’s icons of business will be Apple loyalists. If Apple has any shortcoming, it’s never been able to effectively penetrate the corporate environment. As more employees bring their digital preferences into the corporate world, an Apple acquisition of Linked-In could have helped it gain corporate credibility. Plus, Apple’s youthful personality gives it far more permission to offer new Linked-In services targeting varied, younger business sectors (restaurants, music, film/video, etc.).
Apple could have easily outbid Microsoft. Yet Microsoft acquired Linked-In. Why? One reason is corporate and brand culture. I experienced this firsthand 14 years ago when my agency was acquired — and corporate culture killed it. Perhaps the Linked-In culture is more akin to corporate America and, accordingly, Microsoft. If so, then it makes perfect sense. But tomorrow will be different. Very different. Is Microsoft preparing itself to transform its corporate offering to better support tomorrow’s more youthful professional. Is Apple abandoning the need to penetrate corporate America?
I see both sides and I’m sure many strategic opportunities exist for Microsoft. I just think Apple had the branded permission to do more.
I listened in on the Microsoft – LinkedIn investor call to understand this deal better. Between what was said, and what wasn’t said, I get why MSFT wants this.
Mostly, this is stated as a way to embed Microsoft tools into the global professional workplace. Microsoft plans to integrate LinkedIn data with Office 365 tools to add a convenience factor that merges info from your professional network into your Outlook, PowerPoint, Skype, etc. They plan enhancements like merging your calendar with a newsfeed so they deliver you content they think will support your upcoming goals. Add-in Cortana and Microsoft believes they have the next generation of enterprise HR software.
Nadella skipped by a question regarding privacy concerns with the usual answer of user opt-in. However, we all know, you give away your rights somewhere embedded in a 10-page legal document that failure to agree to disables your ability to use the software at all. As well, I suspect Microsoft will gather and map organizational data for use in support of advertising initiatives across all of the combined platforms.
I’m not sure why Apple allowed itself to be outbid. Perhaps they have greater interest in the consumer market versus Microsoft’s B2B interest. Bottom line, the combined Microsoft – LinkedIn appears to me to be kind of a Big Brother for Business.
Makes sense I guess. But from what you write, it seems more defensive (preserving turf) than offensive (expanding opportunity).
I think this was a defensive move by Microsoft. I don’t see this as Apple being outbid. I see this as Microsoft overpaying. Apple may have wanted LinkedIn. But Microsoft absolutely needed LinkedIn to preserve its turf. And that necessity forced it to overpay to to get it.
In my experience, Microsoft products are not great. More often than not their products are flawed the day they are released. Microsoft gets away with this in areas where it is ubiquitous (PC operating systems, word processing, PC web browsers). But it gets routed in areas where it is not already dominate (mobile operating systems, audio processing, video editing). (And don’t even get me started on Microsoft forays into hardware.)
It appears to me Microsoft needed LinkedIn in order to make/keep itself ubiquitous in those markets essential to its survival. A defensive move in every sense.
Thanks Andy and commenters, I learned something today as I try to stay relevant in a fast changing tech world. Good stuff,