A colleague forwarded this in response to an article discussing the possibility that the undisputed leader in CRM software, Salesforce, Inc. may be acquired.

Oracle, IBM and Microsoft? Wow! This could get interesting. Check this out:
Salesforce.com In Play? Here Are the Possible Suitors. | Re/code
http://recode.net/2015/04/29/if-salesforce-com-is-in-play-here-are-the-possible-suitors/

My reply?

Interesting article, but I strongly disagree with the author’s final statement and hypothesis. He states:

Google: For the search giant to make a move into cloud business applications would be a major departure. Its primary play for business users has been Google for Work, a suite of cloud-based applications that compete with Microsoft’s Office 365. Google has sufficient capital — $64 billion in cash and short-term investments — but little reason to buy Salesforce.”

 

First, Google has been in the “cloud” business from its birth. Google is a cloud company. Everything they do is in the cloud. To them, the internet is the platform. Today, “in the cloud” pretty much means “on the internet” or “on the web.” The move of everything into the cloud is what we call the “Internet of Things,” or IoT.

The second point the author makes is the primary reason why a pure cloud CRM company could be attractive to Google – a stronger foothold into the business market. Google AdWords and Google for Work are both revenue generating services focused on organizations. In addition, Google has been quietly buying and combining the various and diverse pieces it needs to offer compelling, integrated, and affordable solutions to all types of organizations, whether for profit or not-for-profit, from the very small to the very, very large.

For the last 3-4 years, Google appears more focused on building the various pieces and infrastructure needed to develop a “cloud platform capable of delivering end-to-end business solutions” more than its core search and AdWords revenue machines. As Google noted at its launch, its vision isn’t to build a search engine. It is to build “AI” (artificial intelligence). Think of all of the internet connections to various devices as being synapses in the central nervous system. Each device provides stimulus in the form of input. That’s sort of the concept. Talk about big data and predictive analytics! But they are missing CRM capabilities. Shared contacts in Gmail just doesn’t do the trick.

What does Google already have? #1 search engine, #1 digital ad network, #1 video delivery system, #1 browser, a top-tier email service, local targeting, mapping tools, video conferencing (chrome box), collaboration software, their own cloud-based OS, their own mobile devices, a robust global cloud infrastructure, and their own social network. What do they not have? CRM.

Google needs a top-tier cloud-based CRM solution that meshes well into their technology environment to tie it all together. Salesforce, with APEX, VisualForce, the Salesforce1 platform, etc. fits into their technology ecosystem quite well. That’s not to mention that Google needs enterprise-class CRM capabilities internally. How much would they have to shell out each year to use a product like Salesforce? How much would it cost to build something like Salesforce? How long would it take? This makes for a classic buy vs. build decision and let’s not forget that they have the finances to make this purchase.

It’s important to realize that Google+ is no longer a separate division. It is now a part of EVERY division and is being incorporated into everything Google offers. It is the identity management system and online point of presence. Watch; in the future, Google+ will “naturally just mesh into every Google user experience” – it will not be a separate thing but will be more like the user’s “dashboard.” When that day comes, the Google+ user dashboard will be something like combining CRM, Office 365, YouTube, Facebook, LinkedIn, and Twitter into one unified service with Google Analytics there tracking and reporting on every click.

So I can see very compelling reasons for Google to acquire a cloud-based CRM company. Especially one where there is no on-premise option and runs in an environment where the code is very similar to Google’s own code and can leverage Google’s existing cloud infrastructure. Plus, it doesn’t hurt to have several hundred thousand customers and millions of users already spending billions of dollars every year to use it.

To me, this makes a stronger case for Google to buy Salesforce than for Microsoft acquiring it, and I don’t think IBM can really afford it. Besides, they are investing in SugarCRM and open source. That leaves Google and Oracle, or possibly some foreign buyer(s) we are overlooking.

Maybe the US Treasury figured out that if they bought it they could actually use the profits (if there were some) to pay down the national debt. Just kidding.