Thank you!

Finally a person standing up to them

Cheers,

The reason why Google docs and spreadsheet hasn’t caught up yet is for security reasons, not for technical reasons. Why Google is not selling a corresponding intranet appliance for this is beyond me, hopefully that will happen in the not too distant future. Should it happen, there is a huge opportunity right now as Microsoft is killing their own Office customer base (the Office 2007 file formats are new and incompatible).

SF just needs to get a better grip on the small business market, which is becoming more attractive to Google if nothing else b/c of its sheer numbers (or so my google contacts tell me, but they’re all low level developers so what do they know ). Small businesses, esp non-tech-savvy ones (and there are a LOT of those), are still often creeped out by SalesForce; so adding the thought of GoogleAds being able to reach into their [potential] client list scares many of them. The ability to reach out to wider potential customer base is attractive, but don’t discount the fear of Google going intrusively that [still] exists. That’s why Act!, Goldmine and Maximizer are still in the game for the millions of small businesses out there.

I recently asked a small audio visual shop why they didn’t go online for CRM and answer was more or less “it’s on my computer and I can control it.” Putting their client list online to be accessible & managed by someone else – still a big hurdle for many small entities.

And if Goooooogle (or anyone) wants to buy a killer desktop application that combines Act, Lyris & Outlook – i know a company willing to sell!

Acquisition bait – I doubt it! CRM is overpriced at $5.5bn and a 20% or so acquisition premium will make it only more expensive. And for what? GOOG has been having more success than CRM in its office apps, and it will be cheaper for GOOG to build something similar rather than buy CRM.

SAP has also indicated that they will be focusing on the small business market very soon and Microsoft already has 4 Dynamics products – enough to confuse most corporate customers, without having one more.

The announcement is very likely to be something along the lines of Salesforce users will now have access to Google Office Apps.. Something they all did earlier.

CRM needs extra publicity to keep the stock price up (and you see a lot of fluff press releases being generated by them) and any hype is good for them.

Do a search for “google+AFE” and you’ll see.

Cheers,
Doug

Interesting nevertheless!

Benioff has considered acquisitions in the past, but he is in a delicate dance with his stock price, and doesn’t want to be seen to be overpaying. Unlike Google, he just doesn’t have much “room” – a billion wasted is nothing for Google, but Benioff just doesn’t have the luxury, particularly with the P/E it already commands, and the slowing growth. So acquisitions that don’t add to the E reasonably quickly will worsen his P/E, putting pressure on his stock. And Google has that aura of mystery and grandeur about it, which Benioff’s sales guy cheap-shot antics have denied him, so he cannot go on “trust me” too long.

His other strategic problem is his own core business is facing price pressure in the low end. Moving higher to escape creeping commoditization pits him against Oracle/SAP, which he knows is not going to be easy.

So he is going to sell. From his perspective, Google would be the best company to sell to, both from a stock valuation perspective and from a going-with-glory perspective. If the stock goes down, Oracle would surely emerge as a bidder (Ellison has publicly mused about adding Salesforce to his stable). Benioff would do anything to avoid that fate, because in a sense it would represent failure.

His problem is that Google doesn’t really want to pick a fight with Oracle/SAP, at least not anytime soon. Microsoft is their enemy, and they don’t want to make new enemies. So they would probably pass on Salesforce. And the cultural fit just isn’t there at all for Google.

Benioff knows Google is at best lukewarm about him. That is why he is playing coy, letting the impression of Google-being-a-suitor gain ground (which only helps his stock), and hoping that someone else will make a bid, preferably on top of that already boosted stock price. Delicate high-wire act, if you ask me.

Thanks!