The purchase of Linkedin by Microsoft is an unambiguous attempt at ruling Workplace 4.0. It is a monumental step in the transformational change which Microsoft has been undertaking for some time now.
Going back to the 1980s, when Microsoft was a personal computer software company, all it needed was to own the OS platform and the office suite to rule the workplace. Gates envisioned Workplace 2.0, which transformed the world by putting a PC on every desk. This successful endeavor led to the rise of the information worker. As is the case with most creators of new categories, industries, and eras, Microsoft dominated the era of Workplace 2.0.
However, once the networking era arrived in the late 1990s, Microsoft had a problem. It was the beginning of Workplace 3.0, wherein cubicles began to be connected and the work moved from cubicle-centric to a network-centric world. This transition created many problems for Microsoft, which was optimized for Workplace 2.0 and unprepared for Workplace 3.0. It found itself facing new platforms and new competitors. As with any other successful company facing new rules of the game, Microsoft stumbled, again and again, to respond effectively to these challenges.
Although Microsoft had a mixed record in the era of Workplace 3.0, it appears determined to change that tune in the emerging era of Workplace 4.0.
The three trends of social media, mobile computing, and cloud computing are ushering in the era of Workplace 4.0. In this era the workplace is changing from fixed hours, somewhat flexible spaces and well-defined organizational boundaries to an always on, distributed network of knowledge workers, their mobile devices and their personal and professional networks. This new era is calling for collaboration on steroids. Effective communication within organizational networks was critical in Workplace 3.0 but boundary spanning ability across organizations is becoming a critical source of competitive advantage for the knowledge worker today. Although Microsoft stumbled in the era of Workplace 3.0 where it was mostly reactive, it began to prepare for Workplace 4.0 in a proactive manner.
The acquisition of Skype in 2011 and of LinkedIn now, point to how Microsoft is preparing for the workplace 4.0. It is clearly pursuing new goals and building new capabilities to become a formidable competitor in the new workplace.
My definition of transformation is companies successfully pursuing new goals with new capabilities. This is how UPS transformed into an overnight package delivery company, IBM transformed into a services company, and GE transferred into a financial services giant. Microsoft today, is walking the same path today.
Although many industry observers are focused on whether Microsoft paid too much or whether the LinkedIn acquisition can pay out, I see this as a critical step in the transformative journey that Microsoft is undertaking: how to rule the Workplace 4.0?