Yesterday, I commented on Andy Patrizio excellent blog about some potentially high-reward buy-outs/merges, and one of those was Microsoft and Salesforce.com. (Yesterday I focused on Dell potentially buying SGI.) I did some thinking about Microsoft and Salesforce and I like that idea even more than I like the idea of Dell buying out SGI.
Here is why:
• Microsoft is pushing into the whole SaaS world, certainly, but it is lagging behind. This is partially because it has no choice but to keep a lot of focus on its sources of income.
• Salesforce.com definitely knows what its doing and is building a significant platform in the cloud on which to build future enterprise applications.
• Salesforce.com is agile. Microsoft, alas, is not.
• Salesforce.com is not OS-driven, it’s capabilities-driven.
All that said, if Microsoft, as it currently exist, were to buy or try to merge with Salesforce, then Salesforce would simply cease to exist. To counter this, Patrizio talks about Microsoft spinning off its low-end divisions and focusing on the mid- and enterprise-market.
I have to admit I am not so sure about that last part. Much of Microsoft’s advantage is based on the sheer number of users. It can leverage those numbers to get mindshare and to finance projects which begin with a loss but that can develop into new profit centers. So this would certainly be a HUGE gamble.
What do you think?