Microsoft Thinks Salesforce Is Too Costly to Acquire: Report
A new report throws cold water on the prospect of an audacious Microsoft-Salesforce deal any time soon. But Microsoft is busily growing its business cloud ecosystem.Contrary to an earlier report, Microsoft may not be considering a bid on cloud sales and customer service software giant Salesforce.com. Microsoft currently considers Salesforce too pricey, but the company may be open to a deal in the long term, according to a late-day May 7 Reuters report citing two unnamed sources familiar with the matter. Salesforce is the leading CRM company, with a market valuation of nearly $49 billion. "Salesforce's shares, which have risen 48 percent in the last 12 months, trade at 106.8 times the company's forward earnings, well above Microsoft's multiple of 19.1," noted the report. Earlier this week, rumblings of a possible buy surfaced after BloombergBusiness reported that Salesforce had landed on Microsoft's takeover radar after the former was approached by a potential buyer in April. German business software provider SAP denied being in the running while Oracle declined to comment. Salesforce CEO Marc Benioff spent a 13-year stint at Oracle and is considered a protege of co-founder and former CEO Larry Ellison. Although the two companies have been bitter rivals at times, Salesforce's platform relies heavily on Oracle's database technologies. In 2013, the companies signed a 12-year pact to maintain the relationship.
Last year, Microsoft and Salesforce entered into a strategic partnership linking Office 365 with the latter's CRM cloud. "The simple truth is that we wanted to bring more value to our mutual customers, and be each other's customers in relevant areas," said Microsoft CEO Satya Nadella.