Is Microsoft About To Bid For Salesforce?

Microsoft is considering making a bid for cloud CRM giant Salesforce.com, according to Bloomberg.

It cited people with knowledge of the matter as its source, and it comes after last month’s report that Salesforce was an acquisition target for an unnamed suitor.

Possible Takeover

Any deal would be a major shakeup of the enterprise cloud market, but only a few enterprise players have the financial clout to make such an acquisition. This includes database giant Oracle, Microsoft, and even German software specialist SAP, although the latter has publicly ruled out any major acquisitions.

Bloomberg said that Salesforce is working with two investment banks to determine a response to approaches. It could rebuff a takeover approach, or work out a sale.

It seems that at this preliminary stage Microsoft isn’t in talks with Salesforce, and no deal is imminent. Microsoft has also reportedly declined to comment on the report.

However Bloomberg’s sources indicated that Microsoft’s interest in Salesforce was prompted after it reported last month that the company was an acquisition target.

And in order to acquire Salesforce, the purchaser is going to have to have deep pockets indeed. Shares in Salesforce jumped 6.4 percent to $78.46 ($51.54), but the stock closed on Tuesday at $72.75 (£47.77) and the company is currently valued at a whopping $46bn (£30bn).

All three possible suitors have their own customer relationship management (CRM) technologies, but Salesforce is currently the market leader according to Gartner research.

Massive U-turn

Salesforce headed up by its combative chairman and CEO Marc Benioff, pictured right, has had a rocky relationship in the past with Microsoft and Oracle. For example he has used especially colourful language when speaking about Microsoft previously.

Indeed such was the rivalry that Microsoft sued Salesforce back in 2010, alleging that its CRM service infringed nine Redmond patents. Salesforce countersued, before they both settled in the same year.

And then in 2011, Microsoft sued to stop Matthew Miszewski, formerly the general manager of worldwide government at Microsoft, from defecting to Salesforce.

But since then the two companies have kissed and made up.

In 2014, Microsoft and Salesforce finally buried the hatchet with a global partnership agreement. That deal allowed Salesforce CRM apps and platform to connect to Microsoft Office and the Windows operating system, as well as the Windows Phone mobile OS.

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