Nadella’s vision is to tightly knit Microsoft’s apps such that they can mine data from a common dataset. By integrating LinkedIn data with its sales software, Dynamics 365, Nadella is hoping that the tight integration could benefit from inputs coming from Artificial Intelligence to push sales deals.
Satya Nadella, Microsoft’s CEO, has disclosed that Microsoft Corp is in the process of rolling out upgrades to its sales software, which integrates data LinkedIn. The development could be key to the company’s long-term strategy for building specialized business software.
Microsoft’s sales software, Dynamics 365, has the potential to pose a challenge to market leader Salesforce.com. Dynamics 365 is the first major product initiative that springs from its $26 billion acquisition of LinkedIn.
New features of Microsoft’s sales app will comb through a salesperson’s email, calendar and LinkedIn relationships and help gauge how warm is that relationship with a potential customer.
Dynamics 365 has a feature which recommends ways to save an at-risk deal, and include the option of calling up a co-worker who is connected to the potential customer on LinkedIn.
Likely to be launched this summer, Dynamics 365 will require that Microsoft Dynamics customers be also LinkedIn customers.
The AI approach to this app is central to Microsoft’s strategy.
“I want to be able to democratize AI so that any customer using these products is able to, in fact, take their own data and load it into AI for themselves,” said Nadella.
Although Microsoft is a market leader in operating systems and productivity software such as Office, in the sales software division, it is a small player. Microsoft’s ranking is far below rivals such as Oracle Corp, Salesforce.com and SAP.
According to Nadella, specialized applications in fields of finance and sales are critical to the company’s future.
Billing them as Microsoft’s “third cloud,” with the first two being, Office 365 Azure, Nadella’s aims for all Microsoft products to mine data from a common dataset with artificial intelligence and in the process gain new business insights.
“I think that’s the only way to long-term change this game, because if all we did was replace somebody else’s (sales), or (finance) application, that’s of no value, quite frankly,” said Nadella.
Case in point: Earlier this year when Visa was in the process of choosing a cloud-based customer service software, it picked Microsoft over Salesforce because of Nadella’s three-cloud strategy, said Rajat Taneja, Visa’s executive vice president of technology.
Despite this success story, Microsoft has a long way to go before it can rest on its laurels. The company had never released a revenue figure for Dynamics. However, in 2015, the former head of Dynamics had stated publicly that its revenues totaled to around $2 billion.
This pales to Salesforce’s overall revenue of $8.3 billion and $3 billion for its sales software alone. Microsoft’s Dynamics also grew more slowly in comparison to Salesforce: in 2016, Dynamics revenue growth was just 4% while Salesforce registered a 26% revenue growth.
Salesforce is also rolling out AI features in its sales software.
Essentially, Nadella is under pressure to prove that the price it paid for LinkedIn in mid-2016 was justified, said R “Ray” Wang, founder of Constellation Research, an analytics firm. He said combining LinkedIn-powered features with Office and Skype could help.
“Microsoft is putting together the contextual business data people need to be more efficient and build better relationships,” said Wang.