Last week, Microsoft completed its acquisition of LinkedIn for $26.2 billion. After winning a purported bidding war with Salesforce.com, Microsoft again battled the Customer Relationship Management (CRM) leader in front of EU regulators.
Salesforce argued that the acquisition would make Microsoft too powerful in the CRM market, an argument the regulators rejected.
In reality, this battle wasn’t over CRM – at least, not directly. The stakes were much higher than that. In fact, the CRM card was a red herring that Microsoft played masterfully.
All About the Data?
Despite earlier rumors that Microsoft was interested in purchasing Salesforce as I reported in May 2015, and the buddy-buddy antics when Microsoft CEO Satya Nadella chummed up to Salesforce CEO Marc Benioff at the latter’s 2015 Dreamforce conference, the battle over LinkedIn appeared to turn the two software behemoths against each other.
According to Salesforce, this battle was over LinkedIn’s data. “If Microsoft gains ownership of LinkedIn, the company will have the ability and incentive to use LinkedIn’s one-of-a-kind dataset to enhance its own products, while preventing competitors from accessing and effectively utilizing that same data,” according to Burke Norton, Chief Legal Officer and Chief of Corporate and Government Affairs at Salesforce, in a blog post. “The result will fundamentally change the marketplace in a way that will be harmful to consumers.”
Microsoft’s top lawyer, however, dismissed this argument. “We’re committed to continue working to bring price competition to a CRM market in which Salesforce is the dominant participant charging customers higher prices today,” according to Brad Smith, Microsoft’s President and Chief Legal Officer, in an article for the New York Times.
It seemed, therefore, that the two sides in this argument were fighting two different battles: LinkedIn’s data or the CRM market. For Microsoft to win European Union (EU) approval of the deal, it had to show the acquisition wouldn’t stifle competition in the region, so it focused its argument on software rather than data.
Read the entire article at http://www.forbes.com/sites/jasonbloomberg/2016/12/11/microsoft-outmaneuvers-salesforce-for-linkedins-data/.
Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers.
