Salesforce Strikes Deal With UK's Sage, Dismisses Takeover Talk

Sage, the third-largest software company in Europe, becomes a big international fish in the Salesforce application pool.

SAN FRANCISCO—, which has been in the rumor-news cycle lately as a potential takeover target by Microsoft and SAP, brushed that topic aside and made some other news May 12: It announced a new partnership with Sage, a growing U.K.-based business software provider for small and medium-size firms.

Sage, the third-largest software provider in Europe (Germany's SAP and France's Dassault Systemes are Nos. 1 and 2) has moved its Web portal and associated services to the Salesforce1 platform and will become available as Sage Life for Salesforce users later in the second quarter of 2015. This adds a pretty big international fish into the Salesforce application pond.

Sage Life's cloud services enable small companies to combine their accounting, payroll, customer and finance data into one system and make it all accessible from any device at any time for correctly credentialed users.

Sage Services Available on Any Device

Sage Life is customizable for individual businesses and verticals and can be used on any device, including desktop PCs, smartphones, smartwatches and tablets. With its mobile control center, employees can view data in real time. With its social networking-type news stream, Sage Life enables conversations and file-sharing between colleagues, customers, partners, suppliers and other stakeholders.

Sage is acutely focused on the small to medium-size business (SMB) market—from one-person businesses up to those with 500 employees, which it considers "lower-medium-range" size firms.

"Most of them [small and medium-size businesses] still run [accounting processes] in batch," Stephen Kelly, CEO of Sage, said at a lunchtime press conference. "There's been very little innovation in accounting since the Middle Ages. Really, going back to about the 15th century, it was all about journals and memoranda, and everything was done in batch."

Sage is an FTSE 100 company with 13,000 employees in 23 countries.

About Those M&A Rumors ...

Now for an update on those M&A rumors. Bloomberg News reported May 5 through anonymous sources that Microsoft was evaluating an acquisition offer for Salesforce after another unidentified potential buyer approached the San Francisco-based cloud CRM provider. Salesforce held talks with the unnamed potential buyer as recently as April and is now working with a pair of investment banks to decide how it will respond to any overtures, Bloomberg said.

Salesforce, though its annual revenue has surpassed $5 billion and is one of the most successful and influential cloud business service providers in the world, nonetheless has yet to make a profit in 16 years of business.

"I can't comment on the M&A rumors, of course," Marc Benioff, Salesforce's CEO, said. "That's the nature of M&A rumors, and this is the first time we've been in the M&A rumor cycle—we've been swept up into that. That's the reality of where we are right now.

"I'm just focused on what I've always been focused on since Day 1. We were the fastest software company to reach $5 billion in revenue, and, if I have anything to say about it—and this is my dream—we'll be the fastest software company to $10 billion, and with a new model."

Salesforce's stock is up about 6 percent since April 29, when Bloomberg first reported that the company was in the process of responding to a takeover bid. The stock price jumped 10 percent that day, from $67 to $74.65. It closed May 12 at $71.77. Salesforce's market capitalization is about $48 billion.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...