It appears the mystery buyer of Salesforce was Microsoft, but talks have fizzled
businessinsider.com
businessinsider.com
MS wouldn't buy Salesforce (just) for the technology any more than Oracle bought Sieble and PeopleSoft for their technology.
CRM vendors are bought for their customers. CRMs are so deeply integrated into a company's business that the are basically guaranteed money into the future.
Exactly how much money is the only question.
(MS already has a competent CRM offering and a good cloud story. All this talk that they should spend their money to build a competitor misses the point!)
>Now that it appears merger talks are over, shares of Salesforce are climbing again.
Stock price climbed due to potential for a merger.
Stock price climbs again due to end of potential for a merger.
Does a merger have an effect on the stock price? Its presence and absence are both (partial) causes for stock price growth.
I'm probably primed for this due to an article on a logic puzzle[0].
CRM likely thinks it's worth more and/or it could get more. The market agrees for now.
Imagine that someone has the mineral rights to an area in which they assert there might be valuable mining. You are interested, but lack the expertise to evaluate their claims.
Now suppose that a savvy third party comes along and makes them a sizable offer for the mineral rights. You may think, "Okay, this third party has expertise that I lack -- I am upgrading my belief that there really are valuable minerals here."
Now if the original party rejects that offer on the grounds that it's not high enough, you might think, "Okay, they aren't idiots -- if they rejected that offer, they must have genuine reason to believe they can get more later," and upgrade your beliefs again.
1) Rumors circulate of a pending acquisition. Obviously that acquisition will have to happen at a premium to the current price or it won't happen, so that's a signal that if you buy at today's price, you can sell in the acquisition and make a profit. People start buying on that rumor, causing the price to rise.
2) Reports subsequently surface that a $55B offer, which would have been a premium from the original price, was rejected and that $70B was sought. People think "well maybe the real clearing price is something like $65B" -- and that's higher than today's price, so people buy at today's price in hope of making a profit if/when that transaction eventually takes place. The price therefore rises again.
Again, no idea what the price "should" be today, but it's not illogical that the price could rise both on the rumor and on the end of the rumor (especially when, as here, the explanation for the end was the (possibly self-serving) "the price wasn't high enough!").
Coming as I was immediately from the logic puzzle thread, I was primed to think differently about the statements.
A very literal (and a bit naive) reading of the article leads one to conclude that: merger -> increased price not merger -> increased price
This allows us to conclude that knowledge of (merger|not merger) gives us no extra information about whether price should increase.
Again, I am interpreting strictly as a pair of logical statements.
Estimated future earnings -> price
-- John Brooks, Business Adventures
They should be bloody innovating and figuring out how to make better products, not doing internal political infighting. $55B buys you a lot of runway if you want to dedicate it to making your own products.
Hell, for $55B you can buy all the developers and people at Salesforce who are any good at all and wind up with a decent product team. Rent a hotel near the Salesforce offices and offer generous bounties.
Cheaper. More effective than throwing money away.
Why buy a legacy when you can do something better? I guarantee you that whatever SF has can be done better and cheaper.
Why not get hungry sales people who are willing to take SF's customers away from them?
I see these deals coming from people who are incapable of technology development, who have been stalled in corporate culture and who have to justify their existence by making big deals. They are terrified of doing development because they don't know how to -- but they know how to "do deals" and so that's what you get out of them.
Microsoft's successes seem to come from buying technology (not all the time). Historically they haven't been very good at buying customers or teams, or doing strategic "Deals" (capital-D).
It's a waste of money. It makes me want to vomit.
> Why not get hungry sales people who are willing to take SF's customers away from them?
Isn't that what Microsoft's been trying to do for a decade with Microsoft Dynamics CRM?
Microsoft has a CRM, but not one with a significant market share. They also have an analytics platform, but not one that is as clearly defined - there's SQL Server, Azure Analytics, BI for 365. They have no marketing management, no real helpdesk/support system, etc.
If anything I would say that there is much less overlap between MSFT and SFDC vs. Oracle and SFDC.
Plus Ellison is an investor in Netsuite - not that it precludes a SFDC acquisition, but it's yet another hurdle.
No thanks.
He is also not stupid.
They don't sell a reporting package (i.e. THE enterprise tool), payroll, ERP, OLAP, consolidation tools... none of that. That's the real big-corp "enterprise" stuff, and they don't seem particularly interested in entering that space.
I think we can both agree that "Enterprise" is too broad, vague, and context dependent. Is there a good collective noun that represents the "enterprise stuff" (mostly internal management tools but not exclusively so)? It'd be a useful term to have.