Microsoft Is Said to Evaluate Possible Bid for Salesforce.com

http://www.bloomberg.com/news/articles/2015-05-05/microsoft-is-said-to-evaluate-possible-bid-for-salesforce-com

by coloneltcb • 11 years ago

64 73 11 years ago

boomzilla2• 11 years ago

This just doesn't make any sense, not that I know more than the next guy. Nadella is a tech guy, it's very unlikely that he wants to make his CEO depend on such a huge financial deal. Salesforce's market cap is almost 50B right now with no GAAP earning. What's in it for Microsoft?

sjg007• 11 years ago

Market share.

toomuchtodo• 11 years ago

What's in it for Microsoft?

Captive audience (Salesforce customers).

mmanfrin• 11 years ago

Doubling-down on Enterprise in the face of inroads made by Google and Apple.

pnathan• 11 years ago

Microsoft, IMO, gets business needs at a pretty hard wired and basic level, unlike Google or Apple. Their core audience and financials is B2B - consumers are, IMO, a sideshow, and likely have been since the early '90s.

I'm not a huge MS fan, but I am pretty sure that I feel much more comfortable using MS services for my company as opposed to Google, whose customer service is legendary.

jgroszko• 11 years ago

It would further orient Microsoft as a services company than a product company, so it would be consistent with some other moves they've been making (open sourcing .NET, selling Windows 10, Office as a subscription...)

Someone12342• 11 years ago

I think you've hit on it.

Microsoft's ultimate goal is for every new business to buy a Microsoft subscription which includes Windows, Office, Sharepoint Online, Exchange Online, and now maybe a Salesforce product.

It is a one stop shop for all of a business's technology needs. All they need in addition to it is the physical hardware and they're good to go. Right now a lot of businesses only run on Windows+Office+online services+an accountant package. Now they won't even need the accountant package.

boomzilla2• 11 years ago

For big companies like MSFT, this needs to be quantified into future revenue and EPS. What CRM brings to the table right now doesn't contribute much to MSFT to revenue (5B more a year, with expect 20% increase next year) and negative to EPS. So all 50B+ has to be contributed to synergy and goodwill. That's a huge call, and I don't think Nadella would be able to make it.

cykho• 11 years ago

The main driver of Microsoft's net income growth over the last few years has been all enterprise software (Windows Server, SQL Server, Sharepoint). Their CRM (Dynamics) is the #2 player in the market.

Acquiring Salesforce would enable Microsoft to dominate this sector (approach 50% market share potentially). Salesforce has done a great job of fostering an ecosystem of apps that rely on their data platform.

Microsoft can add value to the existing SalesForce product by replacing their cloud infrastructure. While pioneering this concept in the enterprise SalesForce's infrastructure is outdated and aging. Plugging the existing customer base and app ecosystem into Azure (or Microsoft's cloud at large) could be a huge win for both companies.

Net-net this makes a ton of sense in theory, but big mergers destroy value more often than not as they are extremely challenging to execute effectively (it's basically a multi-billion dollar corporate refactoring exercise).

adventured3• 11 years ago

SAP and Oracle are both larger than Microsoft in CRM. SAP is nearly twice the size of Microsoft in that segment.

Nicholas_C• 11 years ago

Wow, I had no idea Salesforce had negative GAAP earnings since inception. I assumed they were making a killing as they are SaaS. I guess they are going the Amazon route and plowing everything back into the company to grow top line.

If this rumor is true I'm guessing MSFT sees the opportunity for some serious cost synergies/reductions. At a $46B market cap that would seem to be a lot though!

adventured3• 11 years ago

Salesforce has amazing gross profit margins as you'd expect (76%), but from day one they've intentionally spent to the max seeking market share. Probably a smart move, given the vast scale of Oracle and SAP, and Oracle's general aggressiveness in trying to corner segments through acquisition to build up a moat around their business.

About 50% of their revenue still goes to marketing expenditures. Another big dent in their earnings potential, of course, are the stock options they hand out (which is why Salesforce likes to talk about non-GAAP) - something like $500m to $600m per year now, equivalent to roughly 10% of sales.

http://www.businessinsider.com/salesforce-earnings-q1-2014-5

bsamuels• 11 years ago

people with knowledge of the matter said.
Salesforce jumped 5.9 percent to $75.82 as of 3:01 p.m. in New York trading.

This article, and the subsequent stock price hike are all the result of an anonymous tip. How can I become one of these anonymous "people with knowledge on the matter"?

A malicious actor could make a killing submitting false tips on buyouts and taking advantage of the following stock price hike.

fragmede• 11 years ago

"Pump and dump" is a common form of security manipulation, which the SEC frowns upon.

http://en.wikipedia.org/wiki/Pump_and_dump

coryl• 11 years ago

The difficult part is getting someone with credibility to publish your tip.

stygiansonic2• 11 years ago

My guess is it is someone close to, or involved in the discussions whom the reporter knows to be reputable (by virtue of past dealings with them or their current position).

There's nothing in the article to suggest the tipster is completely anonymous, and though Bloomberg is never 100% correct, I would expect them to vet their sources. The reporter could merely be protecting their source.

jonknee2• 11 years ago

It's almost certainly someone affiliated with Salesforce (perhaps one of their new investment bankers). There are only a handful of firms large enough to buy Salesforce, this is a good way to gauge interest. SAP, IBM, Microsoft, and Oracle are about it.

mason240• 11 years ago

Right before RadioShack went bankrupt, there was a rumor that Amazon was going to buy them (giving them an instant national chain of showrooms). The stock went up, then RS went out.

I was wondering at the time if someone with stock had known about the pending bankruptcy, and started the rumor so they could cash out.

mathattack2• 11 years ago

I think they need to have some serious backup for the anonymous tip to be published. (Know who the individual tipster is, etc) Just because the tipster is anonymous to us doesn't mean they're anonymous to the news organization.

scott_karana2• 11 years ago

And who holds journalists accountable for vetting the source of the tip? Their editors and publishers, who have an opposing incentive in pushing pageviews?

jrs235• 11 years ago

Salesforce trading resumes after volatility halt

http://finance.yahoo.com/video/salesforce-trading-resumes-vo...

jasonmp85• 11 years ago

How can I become one of these anonymous "people with knowledge on the matter"?

What I'd like to know is how I can get a job where writing the tautology "The […] company’s options could include rebuffing any buyer, or working out a sale" passes as insight.

MCRed• 11 years ago

People have started rumors and profited from them using options in the past.... and been prosecuted for it.

Don't know what percentage of people who try it are successful and what percentage of those get away with it, I just know charges have been filed in the past.

Anyway there's more profit to be made from other people's delusions. (EG: I knew in 2001 there would be a housing bubble and made money between then and 2007 from the bubble. I called the end of the bubble a year early but close enough.)

I could tell you such a delusion right now but you wouldn't believe it... the best, most profitable delusions are widely held, until they aren't. In 2007 everyone thought house prices always rose. I can't tell you how many times I got downvoted on hacker news for claiming there was a housing bubble.

exelius• 11 years ago

How can I become one of these anonymous "people with knowledge on the matter"?

Be a C-level executive at Microsoft who feeds tips to a reporter or banker? Corporate espionage is a real thing, and every major investment firm engages in it. How else can you explain things like the market's ability to perfectly predict earnings results hours before they are released?

After working at high levels of big companies in corporate America, I learned that there are no secrets at any company. Executives will speak privately and candidly to each other about their company's plans; while their companies may be competitors, it benefits both of them personally to have advance knowledge of the plans of the other company (and they may work together at some point in the future). There are a great many things that nobody will confirm publicly, but any major effort at any large US company has been tipped to financial analysts or the press long before its announcement.

rblatz• 11 years ago

Perfect, they can combine the two of the most dreaded technology's to work on. Salesforce powered by Sharepoint!

http://stackoverflow.com/research/developer-survey-2015#tech...

Someone12342• 11 years ago

After having used Sharepoint I can completely understand why people hate it. But I am a little surprised by Salesforce (and Wordpress too).

Can anyone explain why it is so bad?

epochwolf• 11 years ago

Salesforce is extremely complicated and requires an expert to configure it properly. Even then, it may not be able to do everything they say it can do in a performant manner.

tjohns• 11 years ago

Having used Salesforce as a support ticketing system (because it integrated with what sales used), it really is painful to use.

It's like a webapp from the 90s, every action triggers a complete page reload; complete with an occasionally buggy UI, limited searchability, restrictive UI, and occasionally misrouted tickets that were impossible to find. But mostly, it was just really slow.

I've talked to a few other folks who had similar experiences at other companies. In every case, I got the impression that using Salesforce was a mandate made by management without consulting the folks who'd actually have to use it every day.

Maybe it's a bit better on the CRM side, or if your company pays the extra money for Desk.com... but I really wouldn't recommend using Salesforce for handling support tickets.

peckrob• 11 years ago

I can't speak as an actual Salesforce user, but I did do a Salesforce integration for my company a few years ago - integrating Salesforce into our backend systems. It was quite a painful process.

The documentation is dense and somewhat difficult to follow - I ended up spending a lot of time reading forum posts to get a grip on how to use it. The API at the time was also SOAP/XML, with all the fun joy that comes with using that (although, in fairness, it looks like they now have a REST/JSON API too).

The API limits are also draconian, resulting in all kinds of code nastiness to stay within the usage limits. In our case, because of how things are stored in Salesforce and how the API is constructed, it might take 5+ API calls to update various parts of a single Account. We ended up batching changes and sending them every hour or so, and just had to tell our sales folks that info in Salesforce may be delayed up to an hour.

Not to mention, from a UX perspective, it feels like the 00s never ended.

We later ended up switching to Zurmo with a very heavy amount of customization. It ended up making more business sense to bring it in house and pay someone to customize it for exactly what we needed than to sign another Salesforce contract.

adventured3• 11 years ago

Wordpress is a legacy blogging system that comes from the same era of big bloated web apps as eg the various infamously slow and bloated php forums.

The average wordpress theme will have over 10,000 lines of html, php, javascript, css in it.

Wordpress itself has continued to massively expand for no apparent reason. 10,000 lines of code in 2003; 20,000 in 2004; 30,000 in 2005; 40,000 in 2006; 60,000 in 2007; 90,000 in 2008; 120,000 in 2009; 140,000 in 2010; 150,000 in 2011; 160,000 in 2012; 230,000 in 2013; 300,000 in 2014.

It's like the Spruce Goose of cms. Yeah it'll fly, but it's ridiculous.

pbreit• 11 years ago

It's not. People love to complain about ultra-successful software. Sure, it's not perfect, but Salesforce, at least, is a very functional and expandable service.

frik2• 11 years ago

I am surprised that SharePoint got so little love from Microsoft since 2007. Basically all the cruft is still beneath the surface of v2013. I heard Microsoft Redmond outsourced the development to Microsoft India branch which does most of the C# development. The basic concept of SharePoint fulfills what Cairo & WinFS never delivered - so it's actually great, but it has some rough edges and no one cares to fix older features.

Salesforce would fit to Microsoft's product portfolio. They have Microsoft Dynamics CRM but Salesforce offers more features. Then the have Microsoft Dynamics ERP which consists of 5 different ERP products that Microsoft bought: Microsoft Dynamics AX (formerly Axapta), Microsoft Dynamics GP (formerly Great Plains Software), Microsoft Dynamics NAV (formerly Navision), Microsoft Dynamics SL (formerly Solomon IV), Microsoft Dynamics C5 (formerly Concorde C5). Salesforce would theoretically be renamed to Dynamics CRM SF.

notahacker• 11 years ago

It seems to have been purposely designed to require multiple page loads and lots of scrolling to get the core information on an account (e.g. notes on last correspondence, contact details, value of current opportunity, next task) which you'd ideally want all visible on a single screen. Instead, you need multiple tabs. If a company you haven't met isn't already in the system, then adding their details, a brief note on your meeting and a record of the new business opportunity involves you remembering the correct order to complete a minimum of four web form submits and ten page loads, and you'll have to do a surprising amount of manual work to link those records together properly. It compounds this with slow page load speeds; back at my old company we nicknamed it Snailsforce.

These are basics you'd expect any CRM software to handle well, but it's also surprisingly bad at things you'd expect a darling of the enterprise world to do well at (representation of structure of corporate groups, representation of client decision making hierarchies, representation of individuals' roles at multiple clients, ability to find companies by geography etc.) And needless to say, the corporate versions that have been hacked to fit specific needs add all manner of monstrous new forms to fill in and weird bugs with price calculation.

If there's one thing that sums the service up it's this: if you're locked out of Salesforce[1] the screen which advises you of this provides an email address for their help team... which turns out to be autoresponder advising you that the mailbox is not being monitored so please log into Salesforce to lodge the response.

bduerst2• 11 years ago

I knew Sharepoint and Salesforce didn't get much love, but has Wordpress really slipped that low? Is it because it's PHP?

jonknee2• 11 years ago

Perhaps because it's constantly hacked and used to spread malware.

cwbrandsma• 11 years ago

Actually, the entire LAMP stack is just a couple of notches below Wordpress, and Wordpress is a LAMP product. Could be Wordpress is just the most hated LAMP implementation...or because Wordpress is so hated they hate LAMP too.

hippich• 11 years ago

i can't speak much about core codebase, but plugins in general written quite badly too often. These will have security issues, html/php/javascript/css spaghetti in one file. From what I understand - there is no vetting process to accept new developers, nor API forces developers write secure/readable code.

astrodust2• 11 years ago

PHP automatically scores a few demerit points in most circles, but it's not just any-old PHP. It's PHP that's evolved over the better part of a decade and is full of bad ideas that are now baked into the WordPress system permanently.

Like Drupal it's overgrown with weeds. You need to keep pruning to keep moving, or you'll be a victim of backwards compatibility. Just ask Microsoft about that, or those trying to clean up OpenSSL.

There are other systems that are far worse, but they're not as popular so they're irrelevant. Nobody cares about Movable Type any more, for example.

matdrewin• 11 years ago

I'm going to get downvoted into the abyss.

The only languages I would consider for an enterprise system in the most loved technologies would be C# and Python. The rest look good for startups, open source or hobby projects. When you build systems for the enterprise that need to be robust and live for years on end. It's hard to justify taking a risk with a newer language for which there is less expertise and less libraries.

dzhiurgis3• 11 years ago

There is a good discussion about this:

http://meta.salesforce.stackexchange.com/questions/1946/is-s...

It looks like research did not have representative population.

superplussed• 11 years ago

Heroku owned by Microsoft = :sadface

mynameisvlad• 11 years ago

Do you have any arguments as to why that would be? Or are you just making a blanket "M$ is evil" statement? Azure's been getting better and better, you can run Linux VMs and "apps" in a multitude of languages, similar to Heroku. I don't see how it can be a bad thing.

beambot• 11 years ago

If they sunset Heroku in favor of the parent company's Azure architecture?

attilagyorffy• 11 years ago

my thoughts exactly. whilst i don't care about Salesforce's CRM, i wouldn't want MS to put their hands on heroku. Once MS bought one of my favourite companies (Rareware, now Rare as part of MS Game Studios), effectively they killed creativity. I'm not saying that MS is necessarily evil, all I'm saying is that I've seen this once and I have been really disappointed.

apapli• 11 years ago

Interestingly one could say the same about salesforce.com. What positive things have they contributed to Heroku, beyond hoping their developer community would start making apps for salesforce.com overnight (which they didn't).

And do many people actually use Heroku for anything serious? Once they hit a certain size it seems Heroku quickly becomes uneconomic.

Heroku had its time in the sun but rapidly that day is coming to an end...

AdmiralAsshat• 11 years ago

Well it's not like Microsoft can make SalesForce any worse than it already is.

tlogan• 11 years ago

Yes - they can do. They can force you to use SharePoint.

zeruch• 11 years ago

Regardless it will be a failure...combining SFDC with Oracle or MS is pretty much the step before total organ failure from morbid corporate obesity. Every time these megamergers occur they rarely if ever succeed.

If its ORacle, the company that already has 3 poorly intehrated CRMs now has 4. If its MS, then 2. None have perfectly complimentary cultures (although SFDC and ORacle are close-ish) and the monolithic creatures borne of that M&A will just collapse under its own weight.

SFDC uses a Java like DSL, APex, which is lock in, whose life under either merger would be curious to see.

victorhooi• 11 years ago

Is Salesforce really that bad? =(

Curious to hear people's thoughts on it - particularly on their Service Cloud product? What are the issues people are having?

Also, can you extend it easily, or code plugins (or whatever they are) for it easily?

(If I have to deal with it, keen to hear what I may be in for).

Microsoft Is Said to Evaluate Possible Bid for Salesforce.com

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