Tis the season for deal speculation, with Tom Foremski quoting sources who say that Salesforce has approached Oracle “to gauge if there is any interest in a sale at $75 a share.”
If Oracle did take the deal, it would value Salesforce at just shy of $9 billion.
Michael wrote in June 2007 that Saleforce was “acquisition bait,” although at the time the rumors were pointing to a deal with Google. That didn’t happen, although Google and Salesforce did end up partnering for online ad sales.
Salesforce’s stock has weathered the stock market downturn fairly well, closing at $50.86 Friday, down from a peak of $64 in December, however a deal at $75 a share is still down on speculation of a deal at $80-$85 a share last year.
See our previous Salesforce coverage here.
RIP OFF Bubble IS popping
Thanks duncan.
Probably time to pick up few salesforce.com stocks and yahoo too.
Cheers, Nag
That is a lot of cash/debt but both Oracle and Google (including Microsoft) are swimming in incredible amounts of it… I am surprised they aren’t “baiting” themselves to those other two giants… I could even see IBM, Zerox and other huge companies being very interested in the demographic found within Salesforce’s client base.
Jon
http://buzvia.com – Share Influence!
Good price for $75 a share. Sun should pick that up.
Now, is this what we call “pimping out”?
sam, so the question is whether salesforce is hotter than chelsea.
This is very interesting. Though, I do have to wonder, if Oracle wanted Salesforce.com, why hasn’t Ellison gone after it already? Ellison and crew have a history of hostile actions and agressive takeovers, so what is with the silence here?
Most industry watchers agree that Salesforce has been one of the most attractive acquisition targets in the Enterprise market for a while now, but I think that SAP is more likely to win Salesforce, considering that they realize the future potential of SaaS (Software as a Service), unlike Oracle which demonstrated their disbelief during the last earnings call, when Larry Ellison said that cloud computing isn’t for Oracle at this time.
We should never rule out Google, which would make perfect sense for them if they’re planning to go big with the Enterprise market and taking into consideration the culture alignment and resulting easy integration, and also there are IBM, HP and maybe even Microsoft, although their Yahoo acquisition, should it get through will most probably paralyze their buyout arm for a while.
blogged about it here http://technozzle.com/?p=95
Hey Duncan,
don’t you know about the proper disclosure for such posts? Do you own Salesforce shares?
Come on, don’t be naive. This is important legally too. You and TC can get sued if it is later found that you or anyone who you talked to regarding this post (or could have influenced its’ printing) owns CRM shares.
Salesforce.com…blah…
funny duncan,
you stole the post from Tom but you never cared to check the little fact that the 1st comment in http://www.sili...alesforce_w.php mentioned – Larry Ellison is a major investor in Netsuite, a company that competes with Salesforce.
Having been a Salesforce user and administrator in a couple of companies, I say it is a piece of overpriced junk. And support is awful. Oh yeah, if you have never used a CRM system, it looks great. But there are many, many annoying parts to this product in day-to-day use.
Open source SugarCRM (www.sugarcrm.com) is at least the equal and 66% cheaper.
Marc Benioff was originally from Oracle. He is a great pitchman but probably realizes that growth is slowing and wants to get out at a high stock price while he can.
Well, well.
No way is CRM worth $75/share. A t least for another 18 months assuming they ramp revenues to $1.5 billion run rate.
Why would Larry Ellison buy CRM when he has Netsuite?
Yes, may be SAP could buy CRM. BUT, never for $9B
Would GOOG buy CRM for 9B? Hells no!
Would IBM purchase CRM? Welll maybe, but, crazy at $9B
—-
Zoho is a good immedite fit for a Web 2.0 company looking to get into Enterprise/SMB CRM
SugarCRM would be a much better buy for GOOG, SUNW, CSCO, IBM and even ORCL and SAP.
Rumor, but……..
btw- I disagree with johns. I think that CRM has a very good scalable offering. But, I do agree withjohns about “possible slowing”. I spoke to a product manager last week where he told me that he has seen a dramatic increase of existing CRM customers looking at alternatives becuase there pricing model is HORRIFIC.
CRM needs to acquire some technology very quickly that takes them into new markets or puts them in the drivers seat.
@13(Alex)
When I last looked at Salesforce about 14 months ago, their pricing for the Pro level was $750/user/year, the Enterprise version was $1500/user/year. Has their pricing increased? And that pricing was with standard support, which has a 2 day business turn around when you might actually get a response and maybe 50% of those responses actually understood the questions being asked.
OTOH, SugarCRM was about $500/user/year for their hosted version that equaled Salesforce’s Enterprise version. The problem from a market perspective with Sugar is that they do a poor job of promoting themselves.
I didn’t mean to imply that CRM is not scalable. It is. CRM is a very good SaaS product also, particularly for today’s distributed/virtual work forces. In 2007 I was working for a company that used the old Goldmine client/server model. Now that was a piece of crap product that was inflexible and broken much of the time. It’s beyond me how any company could use C/S based CRM software in this day and age.
Salesforce has been working on trying to lock people into their service the last couple of years with their Appexchange and force.com offerings. They know that the more lock-in they can get, the less likely it is that people will attempt to switch to a competing offering. It’s a good strategy.
@4 perhaps a 80-85 a share where more interesting for them
what is this? internet companies for sale season?
I think 80-85 would be a more interesting share for them
Could be a similar Game like with Urchin: add the service to the long tail of customers who get more efficient internally and can spend more easily on lead generation (through Adsense, Adcenter. Techtarget, itpapers.com whatever). Basic version for free, like Google Apps for your domain, some extra costs for premium services (like support if you have dumb employees or old school work flows). But CRM should be independent I think…. can’t imagine ebay running their marketing on a platform owned by a competitor…. Amazon would be a perfect fit or ebay itself… offer free skype to all businesses in Salesforce.com.
@14 johns
The scary part about the cost of CRM is that the cost for the real enterprise is $2,400 per license/year ($200/month). This is a joke! If you need contact center (ip telephony) add another $150 per seat from one of their partners. Now this runs you into $4,100 seat/year.
Plus ERP + Professional Services….. hence why companies are NOW looking at altternatives.
Yes, SugarCRM is a good acquisition target. Agree, that SugarCRM has done a terrible job of marketing their services; there lies the opportunity for a larger software company to take in SugarCRM and pump it through their sales channels. Plus its open source.
Oracle doesn’t need SFDC – they already own Siebel CRM. Stranger things have happened but a buyout just doesn’t make 9B sense with their vision and strategy.
So given all of the “For Sale” signs going up around the web, who is going to buy TC. For the last 6 months plus the TC readership (RSS number is the same) has stagnated.
What value can we put TC?
Salesforce is getting competition from all sides and perhaps a deal makes sense. Our soon-to-launch CRM service, called Upswing CRM, is not only a lot easier on the eyes but also on the mouse: Check out the “click contests” between Salesforce and Upswing CRM to see the difference in design efficiency: http://www.upswingcrm.com/blog