Microsoft to acquire LinkedIn for $26.2 Billion.

That’s all any of us really know. The rest of what you’ve read, beyond any pure financial analysis of the deal, is complete and utter projection. Even Microsoft and LinkedIn have nothing but possibilities to drop into a PowerPoint for us to gaze at. They’ll be figuring out where to go first, and what it means for product offerings and integrations for a while. So, let’s everybody calm down and focus on what we do know that this deal means:

The HCM and HR technology category is hot and getting hotter. The amount of investment in this market continues on a record setting pace. The attention it’s getting from larger product and service vendors that would classically be considered non-traditional to this space, is unprecedented. This is the most high profile move, and it caught everyone by surprise, but just believe me when I tell you other moves are afoot.

The data discussion is going to get very interesting. On one hand, the possibilities represented by the integration of the LinkedIn profile data into all of the Microsoft products in it’s consumer, small business, and enterprise segments are staggering and get me excited about what it means for HR in all market segments. On the other hand, the thought of consumers realizing that their personal profile is accessible via all of those channels could have some data-privacy blow back, whether it’s legal or just consumer action as they take more control.

Here’s the picture Microsoft and LinkedIn drew about the possibilities. Truth is good. I like truth. I also like knowing what other people are seeing about me.:

Profiles everywhere

Microsoft could help HR continue to become the true business of getting work done. Perhaps the biggest impact Microsoft can now have in HCM is in learning and collaboration. Collaboration has long been an area managed by non-traditional HCM products like Microsoft’s SharePoint, or other enterprise tools like Jive, upstarts like Slack, or apps like Trello or Asana. Bringing the network data from LinkedIn to Microsoft  opens the door to so many opportunities for connecting employees within an enterprise with experts and content outside of it. As the workforce continues to become more contingent, this makes LinkedIn’s Profinder move last month into that space look very very smart for Microsoft as a future collaboration play. Also consider the social learning content from LinkedIn’s Lynda, appearing throughout the Microsoft offerings, in particular the Office 365 suite. This is enterprise value that can’t be currently found in Google or Apple offerings.

Look at this picture that Microsoft and LinkedIn drew about their “graphs” and imagine connecting so many of these dots.

2 graphs

The integrations could be an example to the industry. If done right, the application integrations and data transparency between apps that Microsoft could provide and make easy for customers to leverage could be a shining example for the HCM market of the new API World we live in. If done poorly – locking down data and functionality – it will be an opportunity missed. (See Jive’s integration with TemboSocial for employee recoginition, or many of the Slack integrations for examples of what I mean by success here.)

The middle market might have the most to gain. As you may have read in the recent #HRWINS report, the middle market is where the biggest market opportunity exists for HCM. It’s where most of the recent innovation is happening in HR and HR technology, and it probably makes up the biggest chunks of what Microsoft and LinkedIn project in the Total Addressable Markets (TAM). When it comes to collaboration and learning, if executed correctly, these integrations would be incredible opportunities to augment talent management for employers with less than 5,000 employees.

Impressive market potential. If you thought Microsoft overpaid, this should put it into perspective for you. Now it’s time to execute.

LinkedIn and MSFT TAM

The job board is the least interesting piece of this deal. Read the mission Jeff Weiner, CEO of LinkedIn, talked about with his employees after the acquisition. Then read what Satya Nadella, CEO of Microsoft, said in his message to his employees. Job ads and talent solutions might not go away, but this is about the future of work. The future of how work gets done. Maybe.