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Salesforce.com Looking For Acquisition Buyer?

After seemingly being snubbed by Google, Salesforce.com is reported by Silicon Valley Watcher to be approaching Oracle as the next suitor to acquire the high flying software as a service (SaaS) CRM company. Industry pundit Tom Foremski and the Silicon Valley Watcher network report to have reliable sources indicating that Salesforce.com has approached Oracle too see if there is any interest by Oracle to buy Salesforce.com at $75.00 per share.

A potential deal could make sense for a number of synergistic reasons:

  • Oracle's own subscription-based, SaaS offering inherited from the Siebel Systems acquisition has been lackluster at best and Siebel OnDemand will likely not compete well with SAP's recently announced Business ByDesign. A Salesforce.com acquisition would instantly give Oracle much needed credibility in the high growth SaaS market and give it the leverage to continue its assault on arch rival SAP.

  • Oracle would provide Salesforce.com much needed credibility in the enterprise IT market. While Salesforce.com does boast several large customer accounts, lets not forget their average customer subscribes to fewer than 20 users and the lion's share of Salesforce.com customers are small businesses.

  • I found it interesting that in a related article, Matthew Greeley, BrightIdea.com's CEO, suggested the Salesforce.com acquisition could make sense so that Marc Benioff becomes the Larry Ellison successor. While I suspect that the 63 year Ellison is thinking about his success plan, I'd be willing to bet that next-in-line Charles Phillips would have something to say about reporting to industry mouth piece Benioff.

  • The claim that Marc Benioff is losing interest in Salesforce.com is also interesting when supported by Benioff's divestiture and selling history of the company he founded. Benioff has sold 10,000 shares of his company's stock every day since August 21, 2007. Prior to that, he sold 20,000 every single day since November 14, 2006; and prior to that he sold many thousands of shares on a more irregular schedule since July 31, 2006. Certainly founders are entitled to cash out and diversify their equity interests, however, such a consistent and material diversification is not the norm among Silicon Valley tech companies.

When looking at the factors that surround a company allegedly looking for a buyer (Salesforce.com) and a company clearly on an M&A (merger and acquisition) growth plan, an Oracle acquisition of Salesforce.com is clearly a possibility. If I continue to see some traction toward a Salesforce.com acquisition, I'd like to survey some users to better understand their perceptions of the upside and downside of the combined company.

crm blog
sap business bydesign Posted: Monday, February 11th, 2008
Under: Oracle, Salesforce.com

Comments: kelly[at]crmgal.com
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