Partners: Microsoft's LinkedIn Acquisition Will Have Big Implications For Office 365, Dynamics CRM Social Media Integration

Partners see Microsoft's $26.3 billion acquisition of social media business platform LinkedIn opening the door to tight integration of Microsoft mainstay products like Office 365 and the 433 million-member-strong LinkedIn platform.

Microsoft CEO Satya Nadella said Monday that the two companies together will accelerate the growth of the Microsoft's Office 365 productivity platform and Dynamics ERP/CRM software, as well as LinkedIn itself.

Nadella touted LinkedIn's success at engaging professionals, and said the acquisition would be "key to our bold ambition to reinvent productivity and business products."

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Several partners said they see high value for Microsoft in tightly tying Office 365 and Dynamics, as well as other social media services into LinkedIn.

"I think it's a positive thing for Microsoft," said Michael Goldstein, president and CEO of LAN Infotech, a Fort Lauderdale, Fla.-based Microsoft partner. "It will give them more value to their products in terms of integrating LinkedIn into CRM, [business intelligence], or Office 365."

David Felton, founder of Lenovo partner Norwalk, Conn.-based Canaan Technology, said LinkedIn's technology has important functions that can be integrated into Office 365.

"I could see Microsoft using the LinkedIn technology as part of Office 365," Felton said. "This could be part of a closed system large enterprise companies can leverage for internal communications."

Ric Opal, vice president at Peters & Associates, a Microsoft partner in Oakbrook Terrace, Ill., stressed that LinkedIn's functionality, which is centered on digital professional identity, could be important for Microsoft's product platform.

"If you look at the need to drive CRM sales, and Microsoft being able to integrate LinkedIn's functionality, that is massive," Opal said. "I also think there's a digital identity play here -- LinkedIn merges professional and personal life, and if Microsoft can leverage these capabilities as part of their Office 365 platform, which is on the business life side, that is important for the customer."

The acquisition will also set up Microsoft to target another market it is less familiar with in the enterprise, said Felton: social media.

"Microsoft is aiming to get a social media strategy and it wants to further position itself as … the business expert of social media," Felton said. "Microsoft sees some value in social media -- Google has social media -- so I think LinkedIn makes sense."

Christopher Woodin, director of Microsoft sales and strategy at Softchoice, a Microsoft partner based in Toronto, said he was excited about the deal.

"It's going to fairly quickly advance Microsoft's tools and sales capabilities toward cloud, or subscription-based as well as business-oriented services," he said. LinkedIn has done that "exceptionally well and I think Microsoft would be the first to admit they want to do better."

But even as partners praised the potential integration prospects, several executives from top Microsoft enterprise partners, who did not want to be identified, said they see the LinkedIn acquisition as just another sign that Microsoft plans to cut them out of the software licensing business going forward.

The CEO for a top cloud services company, who did not want to be identified, said he sees LinkedIn as a giant contact database that Microsoft will use to sell direct to customers.

"LinkedIn is a big leads database for them," said the executive. "The obvious side of this deal is the direct software subscription sales business for Microsoft. The subtle play is how do they integrate products like Office 365 and Microsoft CRM into LinkedIn."

Microsoft did not respond to a request for comment by publication time.

Enterprise partner concerns around a Microsoft direct sales offensive come in the wake of partner complaints surrounding the new direct Microsoft Surface Membership sales plan.

Partners fear the Surface Direct effort will take away enterprise customers from Microsoft's Authorized Device Reseller channel partners who sell and provide services around the Surface devices.

"I have been a Microsoft partner for 28 years and they have always tried to cut us out of the software licensing business," said the CEO for a large Microsoft enterprise and data center partner, who did not want to be identified. "This is more of the same."

The CEO said he is looking at cutting back on his Microsoft engineering resources. "Microsoft is pushing everyone to the cloud," he said, noting his Microsoft services sales are off 50 percent in the past three years. "We might dissolve our Microsoft practice at some point. I don't know what the future of the Microsoft business is."

LAN Infotech's Goldstein, for his part, said: "From the partner base, I don't know what to expect. I'm an infrastructure reseller, so I wouldn't be able to resell this to clients, but as an end user, I think it will be great to integrate into Microsoft's business products."

Rick Saia contributed to this story.