While it seems like an unlikely combination, it does make sense.
Following an executive order by President Trump banning TikTok after September, it was made public that Microsoft was in talks to purchase the US, Canada, and New Zealand operations of TikTok.
Microsoft has never had any success with consumer internet products- how will they handle TikTok?
Microsoft has seen humongous success with Windows and Office, but consumer internet products such as Office Online, OneDrive, Windows Live Spaces, etc have seen minimal adoption by consumers. On the other hand, their business products are hugely popular. Microsoft 365, their flagship business subscription product, has seen massive adoption in the industry. Similarly, Azure is usually regarded as holding the number two spot in the cloud infrastructure market. (this will be important later)
TikTok, the video sharing app wildly popular with teenagers, and Microsoft, the software company whose biggest customers are businesses.
How does this make any sense?
It does. Trust me.
Microsoft has a little experience with social networks.
In 2016, they acquired LinkedIn, the social network used by professionals and recruiters. While it was already popular before they bought it, they have made few changes to the core business model and have maintained its success.
In 2018, Microsoft acquired GitHub- the wildly popular code hosting and social development platform. When the dev community heard the news, they jumped ship to similar products in fear that Microsoft would ruin it. Two years later, they have made just a few changes. Many developers have jumped back to GitHub.
(Microsoft has numerous other attempts at social networking- I’ll be skipping them…)
Have you noticed a pattern in these acquisitions?
They are all cloud products.
“The Cloud” is arguably the most important invention in this century. Access files from anywhere, watch football games from six years ago at the touch of a finger. Lose your phone? Your photos automagically appear on your new one.
The Cloud is a massive moneymaker for any company offering these services. Somebody has to own and operate the infrastructure to power these services. Early on, Microsoft realized this and began offering Azure. Cloud services now make up the majority of Microsoft’s revenue.
What does this have to do with TikTok? I’m getting there.
Microsoft already hosts a lot of applications and data. If they acquire TikTok, they will suddenly need to host hours upon hours of video as well as user activity. This data will help them understand a market that they have largely failed to capture- everyday consumers. This data will likely be used to develop future products, such as their new xCloud gaming service.
In addition to the demographic data, Microsoft can also prove that they can handle the insane demand that TikTok will place on their network. Companies looking to migrate to or establish a new service on a cloud provider will likely feel comfortable knowing that their data will be accessible with the same reliability as a consumer social network.
While many creators are jumping ship to another platform, this exodus will eventually stop. I think that Microsoft has learned their lesson and will leave TikTok alone. The user base is humongous- it would be a mistake to change anything now.
Only time will tell how this pans out. I’m rooting for Microsoft here- this acquisition could secure their place as the largest cloud provider.
Let me know in the comments below:
- Do you think Microsoft will ruin TikTok?
- Will Microsoft survive a TikTok acquisition?
- Am I totally crazy for thinking they will?
- Why Microsoft wants TikTok - The Verge
- Instagram launches Reels - The Verge
- TikTok is being investigated by France’s data watchdog- TechCrunch
- TikTok collected device identifiers for over a year in violation of Android policies - The Verge
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