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Business Management

A Salesforce sale? Unlikely but intriguing.

A Bloomberg report suggesting that Salesforce.com is working with advisors in a move that could lead to a sale of the company has led to a flurry of speculation. Certainly it surprised me, and my first reaction is to think this will be a storm in a teacup. Many companies are sold early in their lives to enrich owners and to give fledgling efforts the scale to fulfil youthful promise. Others go when their fortunes are at a low ebb but they have technology, intellectual property, customers or staff that are of value. Few go when they are at the Salesforce stage: mature but still growing, full of vigour and with plenty of potential in the tank.

So what’s up?

Well, the fevered reaction might be mostly smoke. Bloomberg cites unnamed sources saying Salesforce has been approached by a potential acquirer. So its counsel could be mostly defensive, against, say, a hostile bidder.

A misunderstanding is also possible. Perhaps Salesforce has assembled advisors for a deal it wants to make, in order to extend a platform that has its heart in managing customer relationships but tentacles in many adjacent markets. A bid for a sizeable company might explain the conundrum: these advisors were talking ‘buy’ not ‘sell’ and ensuring that amid the activity Salesforce was protected. Unlikely but you never know.

If it is really to be a sale, let’s go crazy and speculate. It’s possible that CEO and founder Marc Benioff has had enough of his creation, wants to walk away. Benioff has built one of the great modern business-to-business technology companies. He is also a pioneer, building the first large software-as-a-service company just as many had pronounced the model dead. Even today, Salesforce stands head and shoulders above other cloud leaders like NetSuite or Workday.

It always seemed to me that, like his former boss at Oracle, Larry Ellison, Benioff had an insatiable appetite for growth and a love of the business – a Tamburlaine-like desire to conquer new worlds (Freudians might see something in those towers Salesforce keeps building.) But, also like Ellison, Benioff is no monomaniac. His interests include for example, philanthropy and the welfare of his native city of San Francisco, and Hawaii where he has a home. A political run, like Carly Fiorina, or a project to improve the world, like Bill Gates, is plausible. And of course it’s always possible that some personal circumstance has forced his hand to quit.

If it is a sale then to whom? Oracle would be an obvious contender, giving it instant credibility in the cloud space after hesitant first steps there. Larry Ellison is an investor in Salesforce and is fond of the grand gesture. He also has form in hostile acquisitions if you remember the PeopleSoft purchase and in buying the businesses of old acquaintances – think Siebel.

Microsoft is another company that could well afford Salesforce, even at a fat valuation. It is a company changing gear and again a mega-deal like this would represent a marker. Benioff has spoken highly of Satya Nadella who seems to be making a habit of iconoclasm at a company that has been a reluctant participant in the M&A market.

Google is a third company that might represent a good fit, with its burgeoning workplace ambitions, and this might be a palatable combination for Salesforce employees as the opportunity to build something vast and attractive with like-minded peers.

A left-field candidate might be a company like Alibaba.com, connecting distinct business worlds, or IBM, but I doubt that would wash with Salesforce’s people.

Amid all this, Salesforce and its leader have been uncharacteristically quiet and this in itself is an intriguing point. Until it does speak, the gossip will continue but for now my bet is that this will soon go away and that Salesforce.com will remain what it is – a soaring superpower of the cloud era led from the front by a brilliant operator.

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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