Some Microsoft Partners Fear LinkedIn Deal, Others Predict Growth

Many of Microsoft's partners are eager to learn how its pending $26.2 billion acquisition of LinkedIn will affect their businesses, though some worry it will only help the company undercut their own offerings.

Microsoft and LinkedIn are currently in a quiet period and can't disclose specific plans, but at two International Association of Microsoft Channel Partner (IAMCP) meetings, I was among four participants in a panel discussion weighing some of the acquisition's possibilities.

At the meetings, held in New York on Tuesday evening and in Woodbridge, N.J., on Wednesday morning, we shared various new capabilities that Microsoft has hinted LinkedIn will allow it to deliver, including enhancements to Office 365 and Dynamics, particularly the CRM tools, and new ways to use Big Data. When the 20-plus attendees at each meeting were asked their thoughts, some said they welcome the deal, others had no expectations and a few see it as a threat.

"I think there will be fears but the Microsoft community has an advantage because there is a base to work with that is this complex data store that LinkedIn offers," said panelist Karl Joseph Ufert, president of New York-based Mitra Creative, a digital agency that works with various Microsoft partners. "This is a massive platform of people who have trusted use of this platform for a long time. Pulling that data in is going to be a gigantic advantage to Microsoft."

Also on the panel was Jeffrey Goldstein, founder and director of Dynamics specialist Queue Associates, who is hopeful that Microsoft's plans to tie LinkedIn to its CRM tools will give it a competitive edge. "Microsoft CRM and direct access to contacts and being able to use it as a resource to data and companies you are going to prospect into -- I think that's going to be a huge benefit," Goldstein said.

Eric Rabinowitz, CEO of Nurture Marketing, organized the panel aiming to gauge how the partner community views the pending acquisition. Rabinowitz has used LinkedIn for some time to mine his company's clients' "circle-of-influence," he explained.

"We look at our clients, go into LinkedIn and look at what surrounds them, who their peers are, who they report to and who reports to them," Rabinowitz said. "Then we harvest that information and get e-mail addresses for those people, and instead of marketing to one person in an organization, we reach their whole circle of influence. What's beautiful about the Microsoft acquisition, I think, [is] what I just described will all be there at the push of a button."

Asked later if he was concerned that would marginalize his business, Rabinowitz argued to the contrary. "Right now, it's a labor-intensive service that does not make us much money," he said. "If it's a service, then what Microsoft will do for us is it will improve our service, gaining improved results and be very positive. Also, I can envision us packaging the service into something else we do."

Among those attending both IAMCP meetings who shared concerns about the deal were those who offer end-user training services. LinkedIn operates the popular e-learning service and some wondered if Microsoft will use it to undercut them. At Wednesday's meeting, Lisa Eyerkuss, president of Iselin, N.J.-based Corporate Training Group, shared her concerns over whether Microsoft will bundle with Office 365 subscriptions, as the company has indicated. "If they include it, then Microsoft just slapped the face of its partners who do all the end user training because it's the first item in the budget to be cut," she said.

Eyerkuss emphasized that she takes comfort in having diversified her business in recent years, but she is clearly concerned. "I know it will affect our business," she said. "We have to figure out how to stay away from it."

But for the broader partner base, it appears there's little downside to the Microsoft-LinkedIn deal, though the benefits are to be determined. Kicking off both IAMCP panels, I shared the results of a survey by RCP sister publication Redmond magazine that was conducted shortly after the deal, the largest in Microsoft's history, was announced. The survey of IT professionals revealed that 65 percent use LinkedIn at least once a week, with 28 percent using it daily. By far, the most important reason they use LinkedIn is to manage and keep track of contacts, though many also use it to scan the news feed, participate in discussion groups and, of course, career management.

As stakeholders wonder what impact LinkedIn will have on Microsoft, it's still not a done deal. While it has cleared regulatory hurdles in most countries, including the United States, the European Commission is still set to decide on Dec. 6. CEO Marc Benioff, whose company was unable to outbid Microsoft's successful offer, is trying to block the deal, arguing it will stifle competition.

A report by Reuters Wednesday revealed that Microsoft officials last week met with EU regulators and offered concessions. The report noted that while the EU didn't provide details, officials will share Microsoft's proposed concessions with competitors and customers.

Presuming the deal goes through next month as Microsoft anticipates, perhaps the biggest question is to what degree the company will integrate LinkedIn with Office 365 and the new Microsoft Teams tool announced earlier this month, as well as how it will tie into the new Dynamics 365 business suite, particularly its CRM components. Goldstein said he believes it will add much richer capabilities to Microsoft's CRM stack, and that he is hoping Microsoft shares more specifics as soon as the deal closes -- presuming the EU doesn't delay it.

"I'm excited and I don't know why," he said. "The only thing I do know is if Marc Benioff is upset about this acquisition and is trying to block it, it's got to be good," he said. "There's got to be something there."

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.