Recently, Bloomberg reported that Salesforce had employed the services of top financial advisors to field acquisition offers after one potential suitor approached the company. According to Bloomberg, the advisors could either facilitate the sale of the company or discourage suitors from executing the deal. The Bloomberg report did not disclose the possible acquirer.
If Salesforce, known for brilliant on-demand customer relationship management apps, was to be purchased, it would stand out as the largest takeover of a software company. Rumor has it that Oracle Corp, SAP or Microsoft Corp are the likely suitors. However, the most likely suitor of the three is Oracle.
One fact is that Oracle’s founder, Larry Ellison, was an original investor in Salesforce. It is also known that Marc Benioff, Salesforce CEO, started his career at Larry’s Oracle. The history between these two tech giants could offer Oracle the head start it needs.
Beyond the history these two share, the marriage of Salesforce and Oracle could certainly create a cloud computing behemoth that could be an unstoppable force across the technology industry. After all, Oracle is rapidly establishing its name in the cloud-computing arena. Oracle’s cloud business is currently half the size of Salesforce. Undoubtedly, it is growing at a very fast pace.
Oracle and the cloud
Oracle is making the cloud a focus of their activities. Consequently, it is not hard to easily understand why it remains the core growth driver for the ORCL earnings. Oracle also recently released a ten-point ‘Cloud Plan’ that aims to make it the number one cloud services provider. Clearly, Oracle is finally beginning to experience an array of benefits from the investments it made in space over the past decade. With great security, diverse offering, and low pricing, countless customers are now flocking to Oracle in droves.
So where does CRM fit in?
Salesforce helps to broaden Oracle offering. This fits perfectly with ORCL’s ten-point plan. To be specific, two of the ten points seem to apply to Salesforce. These are number two and five. Number two states that, “Customers are sick and tired of the cost and time involved in endless integration.” Number five, on the other hand, states, “Complete SaaS will win because application suites always win.”
By adding Salesforce to this mix, it will hugely reduce the integration required for customers and vastly improve Oracle’s offering to customers.
Cloud computing has always been and will always be about scale. However, it was initially limited to companies that were expanding their infrastructure to expand capacity and reduce prices; today, cloud computing focuses on product offerings. Providers with the widest product range will carry the day.
If Oracle purchases Salesforce, it will comfortably be able to emerge the top in the cloud computing business. For sure, Oracle will not only achieve its medium and long-term goals, but will also manage to become the undisputed king of the cloud-computing world.
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