The news that Salesforce is preparing for a potential takeover has set markets abuzz. Software giants like Microsoft, SAP, Oracle and even Cisco have been projected as potential suitors for the global cloud computing company which has an estimated $47 billion in market cap and a forecast revenue of $6.5 billion in 2016 — a Bloomberg prediction.
The Markets are upbeat about a speculated mega-merger, taking the company’s shares to an all-time-high at $74.65.
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Microsoft is said to be evaluating the deal. There have been unconfirmed reports that Company’s CEO, Satya Nadella, had previously expressed interest in Salesforce. Microsoft is yet to comment on the media speculations.
European software firm SAP has put an early end to all speculation, ruling out a potential merger with Salesforce.
On the technology side, Salesforce seems to be a perfect fit for Oracle. Many of the products offered by Salesforce are already compatible with Oracle’s database software and often run Oracle hardware. Oracle too has come to recognize the value of adapting to cloud based technology. The company wants to increase the share of its products in the cloud up to 95 percent, in contrast to about 65 percent today.
But the integration of a company with a market capital of roughly $50 billion is not going to be an easy task – not even for an IT behemoth like Oracle.
The mergers are just as much about people behind the business as they are about streamlining business processes and technology transitions. Salesforce owes its remarkable success to its CEO Marc Benioff. He had the tenacity to carry forward his business model notwithstanding the constant demands for profitability from the markets and investors.
Benioff has yet revealed his plans for the future, but if he chooses to join the merged enterprise, he would not be a stranger to Oracle’s corporate culture. Benioff worked at Oracle for 13 years and knows its CEO Larry Ellison very well.
Katie Benner writing for Bloomberg makes a compelling case for Benioff as Oracle’s future (co-)CEO. She cites many observers, including Forrester Research’s Andrew Bartels, who question Oracle’s present leadership’s inability to transform the company into a cloud driven business.
The deal is still in its infancy. It is too early to predict the willingness within the senior management teams to work together if the deal goes forward.
In any case, it is unlikely that a young CEO like Marc Benioff (50) would turn his back on the world of business and technology after transforming the software services market forever.
READ MORE, an interviewed with Larry Dignan for Between the Lines: “Ellison and Benioff show a great example of how competition turns to co-opetition and then true love once there are enough enterprise dollars at stake.”
“Oracle CEO Larry Ellison and Salesforce CEO Marc Benioff, two tech luminaries who have had a history of highly publicized barbs, held a conference call to explain the companies’ recent strategic partnership. You could almost see the doves being let loose and Lionel Ritchie’s “Endless Love” playing in the background. Yes kids, Ellison and Benioff have the tech industry’s best bromance at the moment…”
