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Might Microsoft Buy Salesforce.com?

**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in Q1 2015.**

Microsoft wants to get bigger with an acquisition that will have an impact on businesses everywhere.

The Redmond, Washington-based software giant is said to be talking with a pair of investment firms about trying to buy Salesforce.com, the cloud-based customer relationship management (CRM) provider with a market value of nearly $50 billion – despite never turning an annual profit.

“Any suitor would immediately become the market leader in software as a service (SaaS), since Salesforce is the SaaS poster child for successfully creating the industry and having knocked Siebel off its pedestal in less than five years,” noted Sheryl Kingstone, 451 Research director, commenting on a Bloomberg report that broke the news.

“People with knowledge of the matter” told the financial website that Microsoft’s mulling comes after Salesforce was approached by another company interested in buying it last month. There are no talks between the companies yet, the sources said. Neither industry giant would comment to Bloomberg on the story.

Microsoft and Salesforce aren’t strangers. Last year, they forged an agreement that makes their software work better together. Microsoft’s own CRM software – known as Dynamics – has 7 percent of the market, while Salesforce.com commands 16 percent, according to Gartner numbers from 2014.

So who else could be in the Salesforce sweepstakes? Oracle is considered perhaps the mostly likely to be that unnamed April bidder, but the Silicon Valley giant isn’t commenting. Don’t be surprised if IBM and Google are in the mix before all is said and done. 

“All the stated suitors have had relatively little success competing against Salesforce.com in the cloud space. IBM wasn’t interested in Siebel back in the day, stating it had no interest in entering into the enterprise applications market,” Kingstone added. “Google has been struggling to make headway in the enterprise market in general. Oracle has its own SaaS initiatives, but none with the market success of Salesforce.com. It will be interesting to see if a company with such a strong stance against premises-based software will get swallowed up by one of the companies it’s fought against for so many years.”

Follow senior online managing editor Craig Galbraith on Twitter.


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