It’s been an interesting last 24 hours in the tech industry to say the least. Apart from the billion dollar valuation and M&A news that seem to be a norm these days (yawn!), the world has been focused on two companies – Microsoft, for all the game changing announcements coming out of it’s Build 2015 conference and secondly, Salesforce.com – which all of a sudden is in the midst of a possible buyout rumour mill.
Since I’ve been a part of the Salesforce community for nearly 8 years and such an acquisition may potentially alter the ecosystem completely, it’s natural that I’ve spent a lot of time reading up on the potential suitors.
A quick disclaimer that I’ve close to zero understanding of business and valuation games so whatever is mentioned below is from a loyal and passionate community developer’s perspective. Needless to mention – the views mentioned are solely my own.
Is it really needed?
To be honest, I don’t really know. Developers are not necessarily the best finance gurus and I’m a classic example of that rule. But from what I know, Salesforce is valued at nearly $44 billion, it keeps smashing one quarterly record after the other and in general, the stock is doing well. I’ve lost count of how many times it has been ranked as the world’s most innovative company in the world. Mark Benioff has an envious collection of awards which anybody (yes, anybody) in the world would fail to match.
So, all in all, the world’s most innovative company with a mind-boggling valuation and a strong leader with a proven track record to deliver. Going back to the question – is it really needed? I’m still not sure.
And now, let’s take a look at the potential suitors one by one.
By my own honest admission, I’ve never been a Microsoft fan. However, I also need to admit that I’m liking the recent transformations in Microsoft – adoption of open source, lesser emphasis on making money out of Windows licensing and an overall feel good factor.
It’s all about timing – since the rumours have come out at a time when the Build 2015 conference is in it’s full flow and the Benioff-Nadella bromance has peaked, it’s natural that Microsoft is being labeled as a strong contender to buy Salesforce.
However, I would be very worried if that’s the case. I followed Microsoft’s acquisitions of Nokia and Skype quiet closely and even if I were to put it modestly, the Redmond giant created an utter mess out of both the deals. Of course, Salesforce is a different beast altogether but I still don’t see any obvious benefits of this marriage of convenience. As far as I see, it would be a nightmarish exercise to align Microsoft’s CRM play with Dynamics and it’s Azure cloud with Salesforce’s CRM and Heroku offerings respectively.
If there’s one company which has the cash in the bag to do it, it has to be Apple. Given that Benioff was quiet close to Steve Jobs, this might have been a different proposition if the latter was still around. However, given that Apple’s primary focus continues to be consumer hardware (with increasing penetration in the enterprise), I don’t see an alignment of goals between Apple and Salesforce.
Of course, I have no clue on what kind of an equation Tim Cook shares with Benioff but regardless of that, I think this may be a long shot.
A lot of analysts believe Google is perhaps the strongest candidate in the field to buy Salesforce. The online search giant has no CRM capabilities and given it’s increasing cloud footprint, a match with Salesforce could boost both the companies tremendously. But again, it’s tough to see how an enterprise focused pure play such as Salesforce would fit strategically with a company which is still widely perceived as an online search company with other business interests.
I find it interesting that Amazon is even considered a possible contender in this race. The company is barely profitable and it’s hard to establish a co-relation between an online retailer and a CRM giant thriving on an enterprise play. Of course, with flying drones and the innovative ideas of Jeff Bezos, you never know what’s coming next but this doesn’t sound right a good combination even on paper.
And last but not the least, let’s talk about Oracle. For those who’ve followed Salesforce, there’s a fair bit of history involved between Larry Ellison and Marc Benioff. Regardless of the prowess of Oracle and how this is being projected as a win-win situation for both companies by many analysts, I personally think that this would be one step forward and two steps back for Benioff & co.
As a developer, I see the annual tussle between two giant conferences – Oracle Open World and Dreamforce, locked in a battle for supremacy in the heart of Silicon Valley each year. Oracle has actually been doing quiet well in their cloud adventures for the last year so this does make it an interesting proposition.
From a financial perspective, Oracle doesn’t have the money but that’s something which can be worked out. The real question is would Benioff want to go back in time with a company which he left to build this gigantic empire.
And that’s that. As I mentioned from a developer perspective, what matters to me is how if and when this would impact the Salesforce ecosystem. At the end of the day, I would still worry more about the offline bugs in the Salesforce1 mobile SDK and why my triggers aren’t firing as they should 🙂
But as I mentioned earlier, is it really needed? If you’ve any thoughts, please leave a comment below.