Microsoft’s LinkedIn Deal Could Help Employees Better Collaborate.

Microsoft Corp.’s acquisition of LinkedIn Corp. will offer businesses a familiar tool to foster social networking and collaboration in the workplace, an area that has been stubbornly slow to catch on among workers, CIOs and analysts say.

The $26.2 billion deal, the largest in Microsoft’s history, would integrate LinkedIn’s trove of corporate information with Microsoft’s productivity, collaboration and customer relationship management tools, a move that could broaden the reach of both companies. For example, connecting LinkedIn to Microsoft Office could help meeting attendees learn more about one another directly from their calendar invitations, the Journal’s Jay Greene writes.

Adoption of social tools in the enterprise has been slower than expected, in part because many social networking tools haven’t been able to translate their success with consumers into a business context.

IDC last year downgraded its five-year forecast for revenue growth in the global enterprise social networks market to 19% per year, from a forecast of 23% earlier in the year, and 42% back in 2012. It now expects revenue to hit $3.5 billion by 2019, from $1.46 billion in 2014.

The field has shown signs of life in recent years as Slack Technologies Inc., Facebook Inc. and other firms design business-focused versions of their software. And now Microsoft is betting that an offering that integrates its more traditional tools, such as email, with LinkedIn’s 21st century social networking tools may be the right combination to spur enterprise adoption.

The acquisition “speaks to how social media tools are becoming mainstream in the enterprise and how employees conduct business every day,” said Steve Phillips, CIO at Avnet Inc. IT vendors and internal teams alike also are looking for ways to get more out of social media, especially around enterprise collaboration and customer relationship management tools, he added.

“A lot of what Microsoft is trying to do here is create more of a social fabric that enables them to own a lot more of those relationships,” said Vanessa Thompson, an analyst at IDC.

At Bank of New York Mellon Corp., compliance and security rules prevent employees from using LinkedIn to communicate with potential clients on corporate networks. Folding their data into Microsoft’s products could make it easier for the bank’s employees to identify and communicate with those clients across companies, CIO Suresh Kumar said.

“The ability to cross over from the enterprise and be able to access a network like LinkedIn will go a long way,” he said. Integrating the two firms’ offerings “could let a company leverage the knowledge or relationships of employees a lot more easily.”

The acquisition appears to be another attempt by Microsoft to acquire social software to gain traction for its product inside the modern enterprise, much like they tried to do with Yammer in 2012, said Ted Ross, chief information officer of the City of Los Angeles. This acquisition would allow Microsoft to combine its enterprise software components not only with LinkedIn’s database of corporate users, but also with learning tools like Lynda.com, a business training website LinkedIn acquired last year.

Brent Thill, a software analyst at UBS, said he expects the acquisition to accelerate deal flow in the market for workplace social networking tools. But he cautioned that similar moves by big technology vendors into the enterprise social networking space have largely been “more bark than bite.”

“The problem is that you need the entire enterprise to buy in,” he said, adding that most employees refuse to let go of texting and email. The exception, he said, may be Facebook at Work, which leverages a tool that is already familiar to workers across the enterprise.

Since launching in test mode with a group of select companies last year, Facebook at Work now is being used by more than 450 companies, according to a Facebook spokeswoman. They include Royal Bank of Scotland, which has committed to extend the tool to some 100,000 employees, as well as Heineken USA, Club Med, Weber Shandwick and Canadian Tire Corp. Facebook plans to open the platform up to more companies later this year, the spokeswoman said.

“On the plus, LinkedIn is very much the platform that many have already chosen. Facebook at Work provides a more consumer-centric look and feel,” Mr. Ross said.

“In the end, I believe it will be the employees who decide.”