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Microsoft's LNKD Buy Boosts Enterprise Productivity Lead
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Microsoft (MSFT - Free Report) agreed to acquire LinkedIn yesterday for $26.2 billion, or $196 a share. The company holds most of its cash in short-term investments that it won’t be liquidating to finance the acquisition. Instead it will raise necessary debt. The deal was approved by the boards of both companies and awaits regulatory approval in the U.S., EU, Canada and Brazil.
LinkedIn will operate as a separate unit for now headed by its current CEO Jeff Weiner who will report to Microsoft CEO Satya Nadella. Microsoft expects to complete integration by 2018 and the acquisition will be slightly dilutive to its 2017 and 2018 fiscal years ending in June.
The Future of Cloud Computing
Cloud computing requires companies to prefer running their applications in the cloud and users to prefer interacting with data and applications in the cloud. This requires a lot of paradigm shifting because there is a sense of loss of control over data that you could previously capture in a device under your management.
Cost, security and privacy make up important parts of the equation and these factors encourage companies to explore the cloud. The other part is getting people to use the resources in the cloud, which only happens when the experience is engaging. The ability to create engaging experiences is what Microsoft appears to be targeting with its LinkedIn buy.
Through Office 365, Microsoft already has a suite of productivity tools that is as yet unmatched by rivals like Alphabet’s (GOOGL - Free Report) Google and Apple (AAPL - Free Report) . It has been bundling more and more into this subscription service much like Amazon (AMZN - Free Report) is doing with Prime. Microsoft of course doesn’t believe in loss leaders (even Windows 10 comes with caveats) and luckily for it, enterprise customers would rather have a high-quality product that they pay for.
It also has Dynamics CRM to take care of the marketing side of things. LinkedIn brings in human resource (HR) solutions, and because it’s a network of around 433 million users, it should be able to support CRM functions as well (background checks on people you’re doing business with for instance). As Nadella himself said in the internal memo, “[W]e can reinvent ways to make professionals more productive while at the same time reinventing selling, marketing and talent management business processes.”
The secret sauce making all this possible is of course LinkedIn’s social graph, which will enable Microsoft to really differentiate its offerings and make them compelling for enterprise customers. So signing up for Microsoft cloud through Office 365 could get enterprises pretty much everything they need. And just in case they are interested in further convenience, Microsoft also has Cortana and an army of chatbots it’s developing to fetch and carry information. Could work in the virtual world get any easier?
The Future of BYOD
Everyone has been talking about the bring-your-own-device (BYOD) model for quite some time now, but the hype has far exceeded the opportunity thus far. That’s because BYOD goes hand in hand with cloud computing and, essentially, the ability to share necessary resources more easily and securely with employees, customers/clients and business partners.
True collaboration also requires the different enterprise tools, employees and customers/clients to network and talk to each other. LinkedIn provides the fabric that can make this possible and has the professional networking brand. The rest depends on Microsoft’s ability to integrate it into Office 365.
The Future of Microsoft
Satya Nadella had promised us a tripling of cloud revenue by 2018 and he seems to be doing everything required to get there. He has picked up Microsoft’s Office suite to make it a central point consolidating enterprise customers.
On the consumer side, he is consolidating the user base with free Windows 10 upgrades. Significantly, both these customer aggregators (that seems to be the best description in this context!) have assumed a cross-platform character with Office for iOs and Android and Windows for some traditional Android device makers. The job that remains is to get people to engage with Microsoft products more than competitive offerings.
Nadella has more or less wrapped up the hardware business except for Surface and that might actually get bigger with Surface phones (purely conjecture at this point based on the continuum feature in Windows 10).
And Finally
It seems that Microsoft has recognized the value of choice, so that’s what it is offering customers. It’s a very bold move with many pieces of the puzzle yet to be fitted together. But making some important software and arrogantly expecting (and receiving!) the world in exchange is no longer a formula for success. Microsoft needed a radical change and that’s what Nadella seems to be delivering. So once again, Microsoft wins.
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Microsoft's LNKD Buy Boosts Enterprise Productivity Lead
Microsoft (MSFT - Free Report) agreed to acquire LinkedIn yesterday for $26.2 billion, or $196 a share. The company holds most of its cash in short-term investments that it won’t be liquidating to finance the acquisition. Instead it will raise necessary debt. The deal was approved by the boards of both companies and awaits regulatory approval in the U.S., EU, Canada and Brazil.
LinkedIn will operate as a separate unit for now headed by its current CEO Jeff Weiner who will report to Microsoft CEO Satya Nadella. Microsoft expects to complete integration by 2018 and the acquisition will be slightly dilutive to its 2017 and 2018 fiscal years ending in June.
The Future of Cloud Computing
Cloud computing requires companies to prefer running their applications in the cloud and users to prefer interacting with data and applications in the cloud. This requires a lot of paradigm shifting because there is a sense of loss of control over data that you could previously capture in a device under your management.
Cost, security and privacy make up important parts of the equation and these factors encourage companies to explore the cloud. The other part is getting people to use the resources in the cloud, which only happens when the experience is engaging. The ability to create engaging experiences is what Microsoft appears to be targeting with its LinkedIn buy.
MICROSOFT CORP Price
MICROSOFT CORP Price | MICROSOFT CORP Quote
LINKEDIN CORP-A Price
LINKEDIN CORP-A Price | LINKEDIN CORP-A Quote
The Future of Enterprise Productivity
Through Office 365, Microsoft already has a suite of productivity tools that is as yet unmatched by rivals like Alphabet’s (GOOGL - Free Report) Google and Apple (AAPL - Free Report) . It has been bundling more and more into this subscription service much like Amazon (AMZN - Free Report) is doing with Prime. Microsoft of course doesn’t believe in loss leaders (even Windows 10 comes with caveats) and luckily for it, enterprise customers would rather have a high-quality product that they pay for.
It also has Dynamics CRM to take care of the marketing side of things. LinkedIn brings in human resource (HR) solutions, and because it’s a network of around 433 million users, it should be able to support CRM functions as well (background checks on people you’re doing business with for instance). As Nadella himself said in the internal memo, “[W]e can reinvent ways to make professionals more productive while at the same time reinventing selling, marketing and talent management business processes.”
The secret sauce making all this possible is of course LinkedIn’s social graph, which will enable Microsoft to really differentiate its offerings and make them compelling for enterprise customers. So signing up for Microsoft cloud through Office 365 could get enterprises pretty much everything they need. And just in case they are interested in further convenience, Microsoft also has Cortana and an army of chatbots it’s developing to fetch and carry information. Could work in the virtual world get any easier?
The Future of BYOD
Everyone has been talking about the bring-your-own-device (BYOD) model for quite some time now, but the hype has far exceeded the opportunity thus far. That’s because BYOD goes hand in hand with cloud computing and, essentially, the ability to share necessary resources more easily and securely with employees, customers/clients and business partners.
True collaboration also requires the different enterprise tools, employees and customers/clients to network and talk to each other. LinkedIn provides the fabric that can make this possible and has the professional networking brand. The rest depends on Microsoft’s ability to integrate it into Office 365.
The Future of Microsoft
Satya Nadella had promised us a tripling of cloud revenue by 2018 and he seems to be doing everything required to get there. He has picked up Microsoft’s Office suite to make it a central point consolidating enterprise customers.
On the consumer side, he is consolidating the user base with free Windows 10 upgrades. Significantly, both these customer aggregators (that seems to be the best description in this context!) have assumed a cross-platform character with Office for iOs and Android and Windows for some traditional Android device makers. The job that remains is to get people to engage with Microsoft products more than competitive offerings.
Nadella has more or less wrapped up the hardware business except for Surface and that might actually get bigger with Surface phones (purely conjecture at this point based on the continuum feature in Windows 10).
And Finally
It seems that Microsoft has recognized the value of choice, so that’s what it is offering customers. It’s a very bold move with many pieces of the puzzle yet to be fitted together. But making some important software and arrogantly expecting (and receiving!) the world in exchange is no longer a formula for success. Microsoft needed a radical change and that’s what Nadella seems to be delivering. So once again, Microsoft wins.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>