What does Linkedin really mean to Microsoft?

Microsoft has stirred up a swirling buzz of discussion around the Linkedin acquisition for $26.2 billion. There are a number of angles that have been considered in the gazillion news stories floating around. Here’s a few of those threads:

  • Linkedin is a Salesforce counter by Satya Nadella — It has been argued by Steve Nellis and others that Linkedin’s efforts at developing and selling the tools in the company’s Sales Solutions unit have not gone very far, but the data in Linkedin’s network — when coupled with Microsoft’s own Salesforce competitor — Dynamics — could become a real player. Note that Nadella’s rumored efforts to acquire Salesforce stalled because of a too-high price tag (10X revenues), while Linkedin was much more affordable (7X revenues). Plus, with Linkedin in there are other angles to play.
  • Linkedin is a professional social network, and could counter Facebook for Business — Facebook has not yet released its business variant, Facebook for Business, but it’s supposed to roll out this year. Nadella might be trying to get there first by offering a fusion of Linkedin’s current mix of blogging, social networking, and recruitment use cases with Office 365 productivity options. Linking together the professional graph (Linkedin) with the work graph (Office 365)– as Nadella talked about in a call with the NY Times — and getting a premium on the integration of the two is probably a smart move so long as the seams can be made low friction. There is a devil in these details, but this is one of the most powerful visions for the merger.
  • Linkedin alone was a company with real problems — Linkedin stock got hammered earlier this year after lowered sales estimates. This would be bad in itself but doubly bad for Linkedin, since many of its best and brightest are compensated in part by stock grants, so when the stock falls, so does compensation. As a result, Linkedin was facing a mass exodus unless they could right the boat. This is one of the reasons Microsoft got the terms that it did. And now, people will be compensated in the more standard Microsoft way (as will the accounting for these expenses, which were clouded by non-GAAP practices).
  • Microsoft sees Linkedin as a way to deflect Slack — Personally, I don’t buy this conflation of threats to Microsoft. Yes, Slack is making huge inroads in work technology — specifically as the defining product in the exploding work chat space — but just because is has some of the features of a ‘social network’ (in that people are logged in for long periods of time each day, message each other, can coordinate outside of company boundaries) that doesn’t mean Slack and Linkedin are in some way head-to-head competitors. Yes, Slack is a competitor to Microsoft’s productivity/work technology products — most specifically Yammer, but also the core functionality slowly growing in Office 365 — but that doesn’t mean that Linkedin is intended as a Slack killer. Although Microsoft should be working on that, as well. I just don’t expect it will come from the Linkedin side of things.

After all the dust settles I expect that we’ll see a reoriented Linkedin, with a greater focus on CRM technologies and networking, and also a much enlarged focus on people operations (HR) technologies and networking, an area that Microsoft has functionally no offerings. This will take the form of enlarged platforms, and an ecology of partners building on Microsoft/Linkedin capabilities, as well as other, subsequent acquisitions. And Linkedin will immediately find its operational core — and culture — pulled toward CRM and HR by the Microsoft sales operation.
I also don’t believe that Jeff Weiner will be at Microsoft for longer than his required tenure, two years or whatever it is, and Kara Swisher agrees. More likely he will find new worlds to conquer, and Satya will find someone in Microsoft or Linkedin who will better execute what will rapidly become an integration strategy, rather than a trailblazing one.

How Salesforce & Box are changing the landscape in regulated industries

Sarah is a tech blogger and researcher focused on cloud and enterprise. You can follow her here.
With an aim to encourage the adoption of cloud CRM solutions in regulated industries, Salesforce recently announced the launch of a new platform called Salesforce Shield, which came shortly after Box introduced the general availability of Box Governance. Like Shield, it also focuses on ensuring cloud customers meet legal, regulatory and business policies regarding data storage and transfer.
For organizations that operate in the healthcare, finance and legal industries, both Salesforce Shield and Box Governance may bring the highly sought after flexibility to cloud services without disrupting the organizations’ security requirements. Meanwhile, companies providing cloud-based services to these regulated industries provides a new opportunity to increase marketshare — and in doing so, change the landscape for cloud services. Here’s how…

Cloud adoption in finance and health care

The fact that the leading cloud CRM and cloud collaboration providers have launched solutions for the regulated industries almost at the same time could indicate a new trend that isn’t likely to disappear. Namely, after several years of struggles with cloud implementations, organizations that have strict data security policies have started changing their attitudes towards the cloud. A recent survey by Cloud Security Alliance revealed that the cloud adoption in the finance sector increased significantly in 2014.
Also, 61 percent of professionals working in the finance sector are in the process of creating a cloud strategy within their organizations, according to the same survey. Conversely, only 18 percent say they are planning to continue using the private clouds.
Similarly, the healthcare industry is also seeing an accelerated adoption of cloud solutions. Skyhigh Q2 2015 report on the cloud adoption and risk in health care suggests that more institutions are embracing the cloud to increase employee productivity and cut costs.
Compared to previous years, the use of private clouds in these industries is gradually decreasing — mainly thanks to the growing number of secure cloud solutions designed in accordance with the national security standards. Among them, Salesforce Shield and Box Governance are probably the products that would revolutionize the industries and enable even more organizations to migrate sensitive data to the cloud.

Secure offerings

With the ability to support the strict regulations for data access and retention, Salesforce Shield opens a new door for the organizations that were previously limited to using private clouds for security reasons. The service includes a number of security features designed to enable clients to safely work with the cloud without fear of violating federal regulations. More specifically, organizations in regulated industries will now have access to:

  • Platform encryption native to the Salesforce1 platform.
  • Data archive designed to help organizations cut costs by keeping data in “nearline storage.”
  • A field audit trail that enables companies to keep track of changes and ensure they are using only the most accurate data.
  • Event monitoring for the purposes of increasing visibility of the actions associated with the data use.

Unlike Salesforce, which enables organizations to build trusted cloud apps “using clicks, not code,” Box Governance is a new add-on service that adds advanced security features to Box’s widely used sharing and collaboration SaaS. The company has introduced three key capabilities in order to adjust the service to the needs of organizations that need to ensure compliance:

  • Retention management, which helps administrators control preservation and deletion schedules of their sensitive documents.
  • Content security policies that protect clients’ sensitive data.
  • Defensible eDiscovery to comply with data discovery requests.

The impact

Historically, the cloud has been associated with numerous security risks, which is why its adoption in the regulated industries has been notably slow. While the enterprises managed to find an intermediary solution by implementing hybrid clouds, businesses in regulated industries took more time to actually develop efficient public cloud strategies.
This is especially true for the health care industry, which has probably seen the tightest constraints regarding IT infrastructure innovation. The challenges here range from managing employee productivity apps to authentication, access and audit paradigms, as mentioned in a study by SecureLink. Working with highly sensitive citizens’ data, healthcare institutions have had a limited number of IT solutions at their disposal.
For the past few months, however, we’ve been seeing a significant increase in the number of apps that support HIPAA and FINRA compliance for healthcare and finance organizations. Unsurprisingly, this contributed to accelerating the adoption of new IT solutions in the sector, with the cloud leading the innovation process.
The new offerings by Salesforce and Box are likely to become leaders in the regulated industries market given their already established reputation of reliable cloud providers. The precisely-defined features are likely to be welcomed by numerous organizations worldwide, significantly changing the landscape in the regulated industries, as previously mentioned.
However, this does not mean that their struggles associated with IT innovation will be over. Salesforce Shield and Box Governance may make a deep impact on the way regulated industries use the cloud, but a number of other IT challenges will remain.
This mostly relates to the trends of outsourcing IT components and managing their implementation, which will force these industries to keep improving their strategies until they’re sure they’ve found all the right solutions for their needs.

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