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The Secret behind Microsoft Choosing Not to Buy Salesforce Unveiled

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Jenny Richards
October 01, 2015

Jenny Richards
Jenny Richards is a Contributing Author to WebKnowHow and the DevStart Network.

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The market was abuzz with the news of an unspecified firm taking over Salesforce last month only. According to some reports from Bloomberg talks were in progress between the undisclosed suitor and the Salesforce team. It was believed that the suitor company had plans of buying the software giant as a service company. According to the latest reports by CNBC, Microsoft was the mystery suitor and the two companies did sit down for a discussion, but the talks did not culminate any kind of agreement.

Microsoft had apparently offered $ 55 billion for the highly acclaimed cloud software pioneer, but Salesforce.com co-founder and CEO Marc Benioff had aspirations of selling his company for nothing less than $70 billion. So the deal was struck off however, had this agreement been signed, it would have definitely been one of the most prestigious and gigantic tech acquisitions.

Microsoft had acquired Skype, the video calling firm way back in 2011 for $ 8.5 billion. However, Microsoft was unable to acquire the well-known Yahoo in the year 2008 for an offer of $45 billion. The most mammoth tech acquisition so far has been the AOL and Time Warner merger that was accomplished and announced in the year 2000. The original price for purchasing was supposed to be $162 billion, but due to AOL's consistently declining share value, the deal was signed for $106 billion in 2001.

The Companies at a Glance

Salesforce is currently the largest software maker in the world. The San Francisco-based company has shot to fame for unprecedented success as a cloud computing firm. Presently Salesforce enjoys a market valuation of over $49 billion. On the other hand, Microsoft is said to possess over $95 billion in cash including cash equivalents. So, Microsoft could have acquired a firm like salesforce.com easily. The news of the deal that fell through began doing the rounds earlier last month. CNBC reports confirmed that Satya Nadella, CEO Microsoft, was not ready for committing to a deal that came with such a tremendously high price tag and also, such an impact on Microsoft.

Salesforce Creating Waves

Salesforce is regarded as a powerhouse corporate in the cloud computing world. It is the most acclaimed pioneer of the famous CRM or customer Relationship Management in the cloud. CRM is widely used by firms for managing efficiently their sales efforts. Salesforce test data loader assists you in populating data directly into the test methods implemented by you. You do not any longer require writing several lines of code.

Salesforce has announced this week $1.51 billion in terms of revenue for its fiscal 1stquarter, and it is estimated that the yearly sales could jump up to as much as $6.55 billion. Salesforce.com is now the most accomplished cloud-based application firm in the industry today. The company was founded by Benioff, who was an ex-Oracle executive in the year 1999.

The Tech Acquisition Scenario

In recent times we have witnessed that tech acquisitions have become more and more costly. For instance, Facebook hit the news headlines thanks to its purchases of Instagram, a photo-sharing app for $1billion, WhatsApp, a chat app for over $19 billion and Oculus VR, virtual-reality startup for as much as $2.5 billion. Microsoft is said to have made an offer of $55 billion for purchasing Salesforce.com early this spring. While there was great possibility for a truly blockbuster tech merger, Salesforce made counter offers demanding for $70 billion.

According to some very close sources, the talks resulted in a deadlock as the two companies were unable to bridge the gap in the negotiation process. Salesforce shares had shot up last month, ever since it was reported that a merger is on the cards. Salesforce’s stock today is about $50 billion.

Author Bio: Madison Clarke is a highly acclaimed Salesforce executive with a wide experience and proficiency in the effective implementation and application of the Salesforce test data loader. He is an avid blogger.

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