Microsoft has agreed to invest a substantial sum of money in Uber, according to sources speaking to the New York Times and the Wall Street Journal. The investment is part of a larger round of funding that values Uber at $51 billion.
Not surprisingly, speculation is rampant about the reasons behind Microsoft's investment -- which is said to total about $1 billion if the deal is finalized.
One theory: Microsoft wants to solidify a growing partnership with Uber. Said the New York Times:
Uber recently acquired a portion of Microsoft’s mapping-technology assets and extended employment offers to more than 100 Microsoft employees. And while neither company has announced plans for a partnership, Microsoft’s struggling mobile app ecosystem could benefit if Uber devotes more resources to making its service available on Windows devices.
Here’s another: Microsoft wants to stick it to Google and possibly grab some of the user data generated by Uber.
The company is "collecting a lot of data on things like traffic flow around cities, and there might be tie-ins with Microsoft's data analytics products and services there," Business Insider writes.
An Odd Investment
BI also happens to think the investment is a little off for Microsoft, a point that has gone missing in much of the discussion to date. It writes:
It's odd that Microsoft would make such a big late-stage investment in a company like Uber, which falls well outside of its recent focus on user productivity.
It's not just odd, it's a head-scratcher, Rob Enderle of The Enderle Group tells me.
"This can't be about user data – Microsoft has never been interested in that," he says.
And while Uber is clearly making an aggressive push into driverless car technology, that has never been Microsoft's thing either, he added.
It is Google's thing, of course, which adds credence to the "stick it to Google" theory. Google and Uber undoubtedly view each other as competitors by this point.
Besides Uber's investments in driverless car tech, a Google-owned startup in Israel has begun testing its own ride-hailing service. But Google's empire and interests are huge and wide ranging. Why would Microsoft bother to try to disrupt this one aspect of Google's operations?
Perhaps the answer is simply this: Microsoft is hoping Uber will use its cloud platform for its operations, giving it an instantly recognizable reference client around the world.
"It almost has to be about Azure," Enderle said. "There is no other compelling interest for Microsoft."
Well, there's Uber's $51 billion valuation.
Which is also the point, Enderle said. "This is an investment on Microsoft's part, so if Uber adopts Azure it becomes almost negative money for Microsoft."
"Microsoft gets a huge new client, a great reference and a return on its original investment."
