Does MinkedIn stand a chance against Salesforce?
One of the big reasons for the LinkedIn acquisition by Microsoft is to augment its business services division. After all, Salesforce set the tone and has completely owned Microsoft until now. There are 3 key advantages that Microsoft bought:
- Data — LinkedIn’s data is unmatched and their biggest defensive advantage in the space.
- Team — Reid Hoffman of LinkedIn could be a mighty General in Microsoft’s efforts to get back on top, and LinkedIn has world class data science and engineering teams.
- Competence in networks — Microsoft doesn’t really have any core competency in building mass-consumer networks. The future is hyper networked, and any company that doesn’t embrace that will fall behind. Google+ didn’t work out to be the next Facebook, but it made Google better at personalization, social apps, and single sign-on. Microsoft has Skype.
In theory, having Microsoft applications powered with LinkedIn’s data seems like an appealing way to compete against the Salesforce behemoth.
But LinkedIn’s history betrays one key flaw in this plan which is summarized in two words.
Salesforce has Force.com, Heroku, and thousands of businesses built on top of the Salesforce platform. They have achieved defensibility by being open instead of by being closed.
If “MinkedIn” is to have any kind of fighting chance, the only way is to create their own open ecosystem of apps and lure developers to a new super-platform. Well good news for Microsoft — Hoffman just told Forbes about their newest project ProFinder “ The concept fits very well both within the theory I’ve looked at for how one can build great new applications on top of networks, and within LinkedIn’s mission…”
Contrary to this statement, LinkedIn’s actions spoke louder than Hoffman, when they completely shuttered the useful part of their developer API in May 2015.
LinkedIn’s culture has been extremely closed to outside apps and the idea of creating a platform. The API is leaves much to be desired for developers, the integration UI hasn’t been updated in years, and the data access for developers (which is the only reason to even build something with LinkedIn) has been non-existent. In fact, LinkedIn spends a lot of energy keeping people out of its walled garden.
Will the Microsoft acquisition see a reversal in MinkedIn’s closed API policies? If they want to beat Salesforce, it’s the only way forward.
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