Can Microsoft do for sales what Google did for searches?

By acquiring LinkedIn, the software giant aims to help marketing zoom in on prospects.

Microsoft is presenting its mammoth $26 billion acquisition of LinkedIn as the lynchpin of a sweeping effort to reinvent the professional workplace. Few specifics have been available since the merger was announced this past June, but with the formal completion of the deal last week, the two companies have said they will soon begin providing more details about their plans. Here, in the third installment of this three-part series, we look at how the combined company could infuse sales and marketing with social intelligence.

In his initial take on Microsoft’s plans to acquire his company, LinkedIn’s CEO Jeff Weiner spotlighted several “enormous opportunities.” High on his list was “redefining social selling through the combination of Sales Navigator and Dynamics.”

The former is LinkedIn’s suite of social selling tools, while the latter is Microsoft’s line of enterprise resource planning (ERP) and customer relationship management (CRM) applications. Today, says Microsoft’s CEO Satya Nadella, work is split between the tools that sales and marketing professionals use to do their jobs, such as Dynamics and Microsoft’s Office programs, and social networks like LinkedIn that connect them to their customers and prospects.

By acquiring LinkedIn, Nadella says, “Microsoft aims to weave those two pieces together.” For instance, by tapping social intelligence gleaned from Sales Navigator and LinkedIn members’ profile data, Dynamics users could obtain useful background on new sales prospects. Then once a meeting has been set, the sales reps could learn more about the other attendees from the invites in their Outlook calendars.

Also See: Microsoft clears final hurdle to LinkedIn deal

Key to melding the two sets of applications together is an ambitious scheme to integrate Microsoft’s Office Graph with LinkedIn’s social graph. Office Graph is a set of machine learning and intelligent search technologies that keeps tabs on Office users’ activities, including the types of data that they share and the kind of information that they search for. LinkedIn’s social graph maps its members’ professional accreditations, skill sets and workplace associations. Once merged, Office Graph will know who is sharing what information with whom and will be able to make relevant recommendations based on the user’s current activities and needs of the moment.

“LinkedIn is a disruptive version of CRM,” notes Manish Sood, the CEO of Reltio, a cloud-based provider of data driven business applications. “Every sales-focused discussion that takes place has the potential to leverage LinkedIn-type data that will inform the engagement.”

“LinkedIn should be able to provide sales and marketing with demographic targeting based on business and professional user information,” adds Sheryl Kingstone, research director for business applications at 451 Research. Microsoft, she says, will be able to create a social graph that includes such information as professional interests, company size and business associations.

Tying data from Microsoft’s Office to a LinkedIn identity, Kingstone continues, “could create phenomenal B2B targeting data.” Marketers, for example, would have access to information such as who has viewed which messages on what topics, giving them the potential to forge much deeper connections with prospects and customers.

Acquiring LinkedIn “provides the pieces to bring [Microsoft’s sales and marketing] applications into a world based on business networks and relationships,” agrees Al Gillen, group vice president for software development and open source at market researcher International Data Corp. These, he says, include a relationship platform, data about relationships and content that is relevant to different market segments, all of which can be mined and utilized as extensions to Dynamics CRM.

For sales reps in search of leads, such integration would enable them to use LinkedIn as a reliable and up-to-date data source. For marketers, feeding the LinkedIn data to Dynamics would enable them to identify “look-alike” audiences that match highly specific marketing criteria.

“By connecting the Office Graph with the LinkedIn user graph, Microsoft not only owns the network but enables users to connect to the right colleague, customer, partner or supplier at the right time and with the right information with which to make decisions and resolve exceptions,” explains Gillen. LinkedIn, he adds, “has been long criticized for poor profile controls. But with its development talent and integration with Dynamics CRM through Outlook, Microsoft will have a significant competitive product to Salesforce’s”

All this, however, is unlikely to go down without some customer friction along the way.

“The data on LinkedIn is relatively static,” notes Reltio’s Sood, “since members are the only ones who can make changes to their profiles. But potential customers for that data will want it augmented and updated more frequently.” That won’t happen, he says, unless LinkedIn users believe they still control and have ownership over their information.

“Trust is a big issue,” seconds 451’s Kingstone, “and LinkedIn could become negatively perceived.” Members, she says, may have concerns about updating their profiles and providing additional details, if Microsoft moves forward with plans to utilize that data in a wide variety of contexts.

Kingstone expects this to be an especially significant issue outside the U.S., where personal privacy is taken more seriously. To minimize any concerns, she says Microsoft “has to take pains to avoid doing anything that could be perceived as ‘creepy.’”

“The elephant in the room is that this acquisition makes a lot of people very uncomfortable,” concurs Vanessa DiMauro, a consultant and Columbia University faculty member. The value of LinkedIn to Microsoft is based on the “treasure trove” of data that its members voluntarily provide. But, she warns that if they or their companies begin to suspect that Microsoft is keeping tabs on them or sharing their data with their competitors, they could stop updating or even take down their profiles.

One way to defuse this sort of reaction, DiMauro points out, is for Microsoft to train its users in data privacy considerations and set clear ground rules for disseminating different types of information. Such guidelines would put the software giant ahead of the curve and in a strong position to capitalize on the trend toward social selling.

“Social selling means moving away from selling widgets and focusing instead on your customers overall business needs,” says DiMauro. “By creating a mechanism for understanding other people—what they do, who they connect with and how they do that—Microsoft can help salespeople make the leap and engage in selling of a higher order.”

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