Presently, Microsoft Corporation (NASDAQ:MSFT) is not considering an offer for salesforce.com, inc. (NYSE:CRM). According, to two people familiar with the matter on Thursday. One of the people said that Microsoft regards Salesforce’s present market valuation as expensive. According to the other person, it was probable that Microsoft could reconsider a bid for Salesforce in the long term.
The sources requested anonymity as the deliberations are confidential. San Francisco-based Salesforce is the leader in the annual $23 billion customer relationship management (CRM) market as per tech research company Gartner. Salesforce enables corporations organize and monitor sales calls and leads.
Salesforce’s services are completely delivered via the cloud. No software is installed on desktops. Compared to Salesforce, Oracle Corporation (NYSE:ORCL) and Microsoft have much lesser online CRM revenues. Microsoft and a host of large software firms are looking to significantly boost their presence in cloud computing.
Any deal for Salesforce whose market capitalization is a whopping $49 billion would be exorbitant. Salesforce’s shares which have increased by 48% in the last one year trade at 106.8 times the firm’s forward earnings well more than Microsoft’s multiple of 19.1 according to market data.
The previous month Oracle Chief Executive Safra Catz opined that her firm could gain if Microsoft or another competitor purchased Salesforce.com.
According to her such a purchase would result in a lot of disruption in the CRM market which would benefit Oracle. Catz refused comment on whether Oracle had made any move to purchase Salesforce.
Another possible buyer for Salesforce has declared itself not in the race at all. Earlier this week SAP SE (ADR) (NYSE:SAP) Chief Executive Bill McDermott declared that his firm had zero interest in Salesforce.
He added that his organization had never purchased anything, which was impaired and in decline. In his view, Salesforce’s cloud computing solution was becoming commoditized.
Salesforce is San Francisco’s biggest technology employer and commercial leaseholder. The firm has 16,000 people on its payroll.
