Microsoft’s $26 billion acquisition of LinkedIn last week is the latest in a series of smart bets that has repositioned the sleeping software giant to become something much more. Critics are questioning the premium (7x revenue) paid for a business that seems to have stagnated, but the value created by the combination is compelling and another sign Microsoft is charting a bold new course. A closer look at at the strategy is worth exploring as the key pillars of the plan are relevant to every 21st century organization.

I am not in the business of making stock recommendations or assessing the terms of an acquisition. We all know most acquisitions fail and this may not be an exception. I am often a “standing neutral”, working as an intermediary with buyers and sellers of enterprise IT services, a marketplace that includes Microsoft. As such, I remain agnostic and seek to find the right outcomes that work for the benefit of both parties. That said, as an observer of the broader consumer market, the legacy Microsoft business model and culture created resentment and a strong anti-establishment movement that has benefited Apple, Google, and many others.

As Apple was busy changing the world with the iPhone and Google became synonymous with innovation, I wondered if Microsoft had a vision beyond Windows. Those doubts have been answered. In our current climate of measuring success by the quarterly earnings release, Microsoft may not be the belle of the ball yet. However, notwithstanding the need for successful integration of the acquisition, the vision and supporting strategy of Microsoft caught my eye as something progressive and significant. Let’s take a look at what they are creating and how these key tenets of the strategy are vital to most technology-based organizations (i.e., every organization).

  • As-a-Service: Perhaps the poster child of the vendor lock-in era, Microsoft has turned the corner and is now a cloud services leader. Office 365 may be the most adopted enterprise cloud service to date and Azure is second only to AWS in the broader cloud compute and storage space. As hybrid cloud environments become more mainstream, Microsoft is well positioned to retain and grow its current customer base.
  • Data Analytics: LinkedIn is essentially a data acquisition. As the unquestionable leader of business-focused social media, LinkedIn provides a database of the world’s professional community. The possibilities are intriguing when you consider the merging of LinkedIn profiles with Microsoft’s existing CRM platform Dynamics, a combined asset that may present options for Salesforce.com customers.
  • Digital: Building on the data analytics, the new combined entity can now digitally connect the dots by integrating Microsoft’s “Office Graph” (digital view of calendar, meetings, notes, customers) with LinkedIn’s “Economic Graph” (digital view of employee data, resume, skills, and available jobs).
  • Collaboration: Office 365, Sharepoint, Skype, and Lync are not perfect collaboration tools but are strong building blocks. Again, the LinkedIn online estate creates an outstanding opportunity for Microsoft to become the glue that holds business communications together in a way no other competition could match. Personally, I’d like to see Microsoft acquire Slack to integrate the various tools.
  • Artificial Intelligence: Apple has Siri, Amazon has Alexa, and now Microsoft has Cortana, the personal assistant touted as Conversation-as-a-Service. Microsoft will further the integration of data from LinkedIn into Cortana, bringing to life in conversational form the intelligence captured through the combined digital footprint of the business. Siri or Alexa may be the bot of choice at home but Cortana will likely be your go to assistant at work.

Microsoft seems to have a renewed vision with a focus on what they do well – serve the enterprise with tools and technologies that work well and work well together. They are starting to fulfill the mission of that vision with a strategy built for the future. All organizations should continually examine their strategy to ensure it is supporting the vision, especially as the technology environment and speed of business accelerates. Is your organization willing to look in the mirror, adjust, and make big bets on the future?