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Microsoft’s LinkedIn acquisition could boost its Azure cloud platform

azure logoMicrosoft’s $26.2 billion purchase of LinkedIn, announced earlier today, may present an opportunity to bring the popular business network into the Azure fold, potentially shifting LinkedIn from private data centers to Microsoft’s cloud.

Moving LinkedIn to the Azure cloud, in part or in full, “could be a really important part of this deal,” said Rob Helm, managing vice president of research at Directions on Microsoft in Kirkland, Wash. “LinkedIn was facing the need for a big data center build-out, and Microsoft has a lot of data centers not being fully utilized. So this could be an area where there really is that elusive quality known as synergy.”

Microsoft CEO Satya Nadella this morning didn’t make a big deal about the possibility of moving LinkedIn to Azure, but he did mention it. During a call with analysts and investors, Nadella said, “We have a scaled cloud infrastructure. We fully expect LinkedIn to be able to use that stack.” He referred to the purchase as “the bringing together of the world’s professional cloud and the world’s professional network.”

At the moment, LinkedIn does not use the public cloud, relying instead on leased data centers.

“Most of LinkedIn’s services are hosted on our own private cloud infrastructure,” said spokesperson Steve Lynch in an email.

In its 10K for the year ended Dec. 31, LinkedIn said it “leases its office facilities and data centers under operating lease agreements.” It said “our website and related infrastructure are hosted on a network located in multiple third-party facilities, and we lease data center facilities in various locations.”

Microsoft has been able to take lessons learned in running its own online services, such as Xbox Live and Skype, and translate those into improvements for customers of its Azure public cloud. Another benefit of the deal is to keep LinkedIn from going with Amazon Web Services, Microsoft’s rival, the largest player in the public cloud.

LinkedIn did not immediately respond to a request for comment.

LinkedIn is big and complex, Helm said, so it’s likely some pieces — storage, back-up or disaster-recovery services — would be implemented in the cloud before the application itself. Moving the entirety of the application “would be a long-term process,” he said.

Nadella this morning also discussed another, less direct connection between Azure and the LinkedIn purchase.

In answering an analyst’s question, Nadella referred to Microsoft Graph – a unified API endpoint for accessing Outlook, OneDrive and other cloud-resident Microsoft data – calling it “the most strategic Microsoft app API, even for Azure developers.” Now, with the LinkedIn purchase,  “we have one more: the LinkedIn Economic Graph,” he said.

LinkedIn defines its Economic Graph as “our vision to digitally map the global economy.”

“When you expose [these Graphs] to developers and then also give them all the cloud infrastructure, that’s when you have the higher value,” Nadella said. “The combination of these higher-level services that also have APIs, along with the infrastructure services, is what gives Microsoft’s cloud the most unique monetization capability and long-term return capability.”

This post was updated at 11:28 a.m. on June 13.

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