Microsoft’s LinkedIn Integration with Office and Dynamics Could be a Big Win

LinkedIn App for Windows 10

Microsoft is clearly back on the growth path, posting $24.1 billion in total revenues, up from $23.8 billion in the year-ago period. At the Q2-2017 earnings call Thursday, the company showed 93% growth in Microsoft Azure, finally breaking its triple-digit-growth streak after five consecutive quarters.

The earnings call itself has been covered in great detail by several sites, so we’re not even going there. What we’d like to showcase is a relatively minor announcement that could have a massive positive impact on Microsoft’s revenues from productivity software in the future.

During the call, Microsoft CEO Satya Nadella said that focus on LinkedIn would be centered on user growth and user engagement. But he also mentioned that quick integration was planned between LinkedIn and products such as Office and Dynamics.

Both products are now primarily served over the cloud, as SaaS products, under the names Office 365 and Dynamics 365. If Microsoft can integrate these tools and offer them as “click to add” services on LinkedIn, it could mean a tremendous boost in software adoption.

LinkedIn is home to nearly 500 million business professionals around the world, most of whom are already familiar with Microsoft’s enterprise products. This integration Nadella referred to could leverage that existing relationship and rack up some serious numbers for Office 365 and Dynamics 365.

Office 365 is already the most used SaaS product in the world by user base, having beaten out companies like Salesforce, Box and GSuite (formerly Google Apps for Business) in a short span of time between 2014 and 2016.

The integration could effectively cement Microsoft’s position in the enterprise software market, which is currently a $333 billion market.

The current SaaS leader, Salesforce, already generates nearly $7 billion from this market, and hopes to hit in excess of $8 billion this year. Microsoft is still far away from posting such SaaS revenues, but the company has been pushing hard into the segment from multiple angles, promoting Office 365, building the Surface devices portfolio around their enterprise software and, more recently, converting their CRM/ERP software – DynamicsCRM – to a completely cloud-based SaaS product called Dynamics 365.

LinkedIn is not a big earner for Microsoft, and that was never the expectation despite putting more than $26 billion into the deal. The professional networking company posted $228 million in quarterly revenues with a loss of $100 million. But that’s not where its value lies.

The real value is the nearly 500 million (467 million reported as of Q3-2016) contacts that Microsoft now has direct access to. It can now communicate regularly with the LinkedIn community and gradually perpetuate its cloud products through integrations like the one Nadella referred to on the call.

Integrating SaaS with the LinkedIn platform is an ongoing process that was announced last month. It’s a tedious task because each of the accounts will need to be linked to their respective Office 365 Microsoft accounts. There is no information yet on when the integration will be complete, but once it’s done, getting add-on services will be possible right from your LinkedIn account.

It’s extremely difficult to estimate the gains Microsoft can expect from this integration but, from a LinkedIn user perspective, it certainly opens the doors to greater engagement with Microsoft’s productivity and business SaaS applications. And when engagement rises, so do revenues.

Together, Office 365 and Dynamics 365 offer a robust CRM/ERP/Productivity/Collaboration suite that is indispensable to business users, most of whom are already familiar with Office tools, Outlook, Skype and so on.

In such a scenario, it’s hard not to see Microsoft making big strides in the SaaS segment over the next few years, eventually giving even Salesforce a run for their money.

Here’s a list of immediate priorities for the LinkedIn integration, courtesy ZDNet:

  • Providing LinkedIn identity and network in Microsoft Outlook and the Office suite
  • Delivering LinkedIn notifications within the Windows Action Center
  • Enabling members drafting resumes in Word to update their profiles, and discover and apply to jobs on LinkedIn
  • Extending the reach of Sponsored Content across Microsoft properties
  • Providing Enterprise LinkedIn Lookup powered by Active Directory and Office 365
  • Making LinkedIn Learning (including its assets) available across the Office 365 and Windows ecosystem
  • Developing a business news desk across the content ecosystem and
  • Redefining social selling through the combination of Sales Navigator and Dynamics 365

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