CIO Today HOME LATEST NEWS NEWSLETTERS SEARCH Search
  LATEST NEWS FOR WEDNESDAY MARCH 29

Close Search Box
CIO Today
BUSINESS BRIEFING
Why Microsoft Might Buy CRM Giant Salesforce
Posted May 6, 2015
Why Microsoft Might Buy CRM Giant Salesforce
Next Story
EARLIER
Nvidia To Wind Down LTE Modem Business
THIS STORY
Why Microsoft Might Buy CRM Giant Salesforce
Next Story
LATER
Finalists Named in Tech Startup Competition
YOU ARE HERE:   HOME arrow BUSINESS BRIEFING arrow THIS STORY
NEWS OPS

By Jennifer LeClaire. Updated May 6, 2015 2:17PM

SHARE

ALSO SEE

Rumors around a Salesforce Relevant Products/Services takeover are heating up. After a swirl of chatter last week about Oracle being a likely suitor for the company, the talk has now turned to Microsoft as a possible buyer for the customer relationship management giant.

Salesforce shares climbed on Tuesday afternoon on the speculation that Microsoft could buy the company. Neither Microsoft nor Salesforce could immediately be reached for comment.

Along with Microsoft and Oracle, Google and SAP are among the names analysts are tossing around as possible suitors. In fact, it may have been Oracle’s move to raise $10 billion that started all the rumors and Oracle could be the frontrunner in the race to acquire Salesforce.

Taking .NET Devs into the Cloud

We asked Chuck Ganapathi, former senior vice president for Salesforce and founder and CEO of business productivity tool builder Tactile, to get his take on the Microsoft rumors. He told us a Microsoft acquisition of Salesforce makes a lot sense for two reasons.

First, Microsoft lost the platform wars. As the original platform company, enterprise IT departments would have proudly called themselves “Microsoft shops,” he said. Now, however, .NET and Azure have since been trumped by Java, Linux and open source, and more recently the cloud platforms, he added.

“The days of the Microsoft developer certification being a badge of honor to developers are long gone. Their best option would be to buy Amazon Web Services, but that’s not going to happen,” Ganapathi said. “Buying Salesforce is a lot more realistic.”

Certainly, the Salesforce platform is one of the fastest growing enterprise IT platforms by all measures -- number of customers, number of transactions, number of developers, and number of apps. Microsoft is good at building developer tools and if the company marries those with Salesforce’s cloud platform, Ganapathi said it could be a way for Microsoft to transition the millions of .NET developers into the cloud world.

The CMO Factor

The second reason Ganapathi said Salesforce is a strong bet for Microsoft is the reality that its core Windows, Exchange, and Office businesses are getting commoditized. With Apple giving away Mac OS and the productivity apps and Google selling Google Apps for next to nothing, the market is in a race to the bottom, he said.

“This means Microsoft has to replace those revenues with new sources that are higher up in the stack. The application layer of the stack is booming and Salesforce is its darling,” Ganapathi said. “Salesforce is getting a lot of traction in enterprise CRM, but Microsoft dominates the mid-market.”

As he sees it, combining the two would sew up the market for Redmond and put tremendous distance between it and the second and third players: SAP and Oracle. What’s more, integrating Salesforce natively with Microsoft’s productivity tools -- Outlook and Office -- could cement Exchange’s position in the e-mail world and guard against Gmail’s advancements, while also improving CRM adoption, he said.

“Finally, chief marketing officers (CMOs) are becoming increasingly important -- and well-funded -- buyers of IT and Microsoft is nowhere in that equation. Having Salesforce’s marketing cloud will help Microsoft grab CMO wallet share,” Ganapathi said. “By leveraging Salesforce’s cloud platform to stop the bleeding on the IT side and Salesforce’s CRM and marketing products to capture the wallet share of a company’s chief sales, customer service, and marketing officers, Microsoft has a chance to regain its place in the enterprise.”

Tell Us What You Think
Comment:

Name:

FX-GUY:
Posted: 2015-05-06 @ 4:33pm PT
lol, MSFT may "regain its place"? "lost the platform wars"? Java won because .net died off and only azure supports it? and finally g-apps are killing office.

I don't think you can back up ANY of those claims. Not only because azure runs java, and linux just fine, but because AWS and google's clouds could not afford to be in business without support for windows. Google tried and had to give up and bring windows in? So if MSFT lost the enterprise, why can no successful cloud platform do without it? Because java/linux, etc are just part of the market. The other part is all MSFT, server, sql server, etc. And azure, well azure doesn't care what you run. If office is dying, why does it keep growing? If MSFT lost the enterprise, why does windows server bust record sales and revenue along with sql server A after Q.

MSFT should buy salesforce to keep it away from AWS and oracle, but not because its windows or .net platform are doing bad. In fact, .net going open source just put a big dent on java's last hope: linux x-platform support. And based on the community's response, java is basically a bet on oracle at this point and nothing more.

The tone of this Ganapathi is silly. To dismiss windows and .net is as silly as dismissing java and linux: you do either one and you won't be taken seriously. Thus this guy just shot his credibility.

JoeWTF:
Posted: 2015-05-06 @ 1:25pm PT
Seriously, Microsoft lost the platform wars? My organization has 1,000s of Windows Servers with zero Linux or open source.

MORE IN BUSINESS BRIEFING

Next Article >

INSIDE CIO TODAY NETWORK SITES SERVICES BENEFITS