Report: Microsoft Wasn't The Mystery Suitor For Salesforce, But Is Now Considering A Bid

Microsoft is considering making a bid to acquire Salesforce.com after the Software-as-a-Service giant was approached recently by another interested company, Bloomberg reported Tuesday.

Microsoft and Salesforce aren't currently in talks and there's no deal on the table, according to the Bloomberg report.

Some industry watchers believe Microsoft, with $95.5 billion in free cash and investments, was the company that approached Salesforce last month about a potential acquisition, but Bloomberg's report suggests otherwise.

But now that Salesforce.com has hired two investment banks to either facilitate or fight off that suitor, Microsoft is considering getting in on the action, according to Bloomberg.

Oracle, with $13.7 billion in free cash, is considered to be another leading candidate to make a play for Salesforce, which had a market capitalization of just under $47 billion at the close of Tuesday trading.

Spokespeople from Microsoft and Salesforce declined comment.

Microsoft partners told CRN they're excited about what would be the largest software acquisition in history. Such a move would also serve as irrefutable evidence that CEO Satya Nadella is serious about putting cloud at the center of Microsoft's future strategy.

Salesforce in recent years has been reshaping itself as a mobile vendor whose SaaS apps run on all the major device operating systems, so that would mesh well with the "mobile-first, cloud-first" course Nadella has set.

Ric Opal, vice president at Peters & Associates, a Microsoft partner, said a Microsoft acquisition of Salesforce.com would be "interesting and complementary" to the software giant's existing product portfolio.

Microsoft would benefit from being able to target a different set of customers than it's used to working with, many of which are outside the IT industry, said Opal.

"That would open Microsoft up to a whole new type of conversation and dialogue inside the customer base," Opal said. "If Microsoft were to acquire Salesforce, the productivity throughout the stack would be huge."

A Salesforce acquisition would also give Microsoft access to a new, massive set of customer data, which it could leverage using its Power BI tool, according to Opal.

Jeff Chandler, president of American Technology Services, a Fairfax, Va.-based Microsoft partner, told CRN he thinks Salesforce.com would be a good fit for the software giant.

"I don’t see how Microsoft can not be in the mix for Salesforce," Chandler said via email. "They would need to come to grips with the technological differences, as well as the positioning for Microsoft’s CRM product, but it would be a huge plus for Microsoft."

Chandler said he thinks a Microsoft acquisition of Salesforce.com would enable him to offer the CRM product of his choice without having to worry about potential competitive repercussions.

"I would much prefer Salesforce over Microsoft CRM in the first place. If Microsoft were to acquire Salesforce, it would resolve that conflict," Chandler said.

Douglas Grosfield, president and CEO of Xylotek Solutions, a Cambridge, Ontario-based Microsoft partner, told CRN he thinks a Microsoft acquisition of Salesforce would essentially be game over for other CRM vendors.

"Salesforce.com is the big gorilla of the CRM space, and an acquisition would give Microsoft strength in other areas as well," Grosfield said. "Microsoft would get a competitive advantage on everyone else on the playing field."

PUBLISHED MAY 5, 2015