Google and Salesforce.com: Why don't they merge?

Google and Salesforce.com: Why don't they merge?

Summary: The worst kept secret of the last week--Salesforce.com integrating Google Apps into its CRM applications and validating the search giant's Office killer is official--but in the grand scheme of things this partnership could be viewed as a precursor to future merger.

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The worst kept secret of the last week--Salesforce.com integrating Google Apps into its CRM applications and validating the search giant's Office killer is official--but in the grand scheme of things this partnership could be viewed as a precursor to future merger.

The basic gist is this (Techmeme): Salesforce is integrating Google Apps into its applications. As Phil Wainewright notes: Salesforce is embedding email, documents, online chat and integrated calendaring directly into its core sales force automation, marketing and customer service applications. Garett Rogers has been noting that Google Apps is becoming a thorn in Microsoft's side. Salesforce made the announcement via its blog overnight.

Add this latest integration effort together and you come up with the following: Google is serious about the enterprise and is looking for distribution of its office suite. Salesforce sees some synergy and a nice add on. Both companies view themselves as a platform-as-a-service player and could collide at some point in the future.

Wouldn't it make sense for these two companies to merge? I always figured Salesforce would wind up with Oracle--or even Microsoft or SAP. However, Google would also be a very logical acquirer. Last week, I noted that IT execs are very interested in what Google can do in their companies. They're just not quite sold yet and are wary of depending too much on Google's cloud. A purchase of Salesforce would get these IT fence sitters off the fence rather quickly.

To be sure, Salesforce wouldn't be cheap--its market cap is $7.3 billion--but Google could afford it, keep Microsoft CEO Steve Ballmer up for a few weeks and take the software giant's best move off the table. I'd argue that if Microsoft really wants to get this Web thing down it should drop its unhealthy infatuation with Yahoo and buy Salesforce, Omnitures and a few others with its $40 billion plus.

This merger between Google and Salesforce won't happen today, but as you read the endless coverage about Office 2.0, the computing cloud and all the other stuff keep in mind where this thing may really be headed.

Also in case you missed it: SAP Chairman Hasso Plattner and Salesforce.com's Marc Benioff squared off at the Churchill Club a few weeks ago and caused quite a enterprise software dust-up.

We recapped the debate at the time and questioned whether Benioff was overestimating his company's platform. Here's the short version of the video in case you missed it.

Topics: Enterprise Software, Google

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6 comments
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  • There are compelling arguments in favor ...

    as I speculated last year during all the chatter in the run-up to the original announcement of Salesforce's alliance with Google:

    http://blogs.zdnet.com/SAAS/?p=334

    But would Google be willing to pay so much? (it would have to be quite a bit more than the current market cap, given the growth Salesforce is still putting on).

    And would Salesforce continue to flourish within Google? I suspect Google top management hasn't yet realized how much it needs to learn to sell effectively in the enterprise - it may even believe over-arrogantly that it doesn't have to, because it's changing the rules of the game. I think Benioff would be wise to hold out for now if the approach did come.
    phil wainewright
  • RE: Google and Salesforce.com: Why don't they merge?

    The drive to merge would require Google further elevating
    the position of enterprise in their strategy. This could
    certainly happen. On the other hand, the lack of action
    from the legacy big four (IBM, Oracle, SAP, MSFT) has left
    salesforce.com to continue to grow at a torrid pace.
    Trapped by the innovators dilemma, these legacy providers
    sit trapped between what they have and what the must
    move towards.

    At Appirio, we were fortunate to be the first software and
    services firm to partner with salesforce.com and Google
    Enterprise. With this announcement, the openness of their
    platforms allowed us to create four of the applications
    being featured (http://www.appirio.com/blog).

    We love how both approach innovation and drive results,
    so its hard for us to not salivate a little and the potential :-
    )
    Narinder Singh
  • Microsoft problems deeper than Yahoo

    [i]I???d argue that if Microsoft really wants to get this Web thing down it should drop its unhealthy infatuation with Yahoo[/i]

    It's not their choice of takeover targets that's hindering Microsoft, it's their addiction to fat clients.

    MSFT wants to do the web 2.0 thing, they just want you to do it their way. Their fat client OS, an installed version of their productivity software...now you can do the web thing. Negating the most meaningful benefits of web-enabled productivity applications.

    So Redmond fiddles while Google goes around setting fires in the enterprise. Teaming up with SalesForce is brilliant. And MSFT isn't the only company laying awake nights.

    And there are people like me wandering around telling business I'll help them transition to thin clients and web-enabled productivity. Hehe. And business is good. Mostly talk, but there's a lot of it.
    Chad_z
  • RE: Google and Salesforce.com: Why don't they merge?

    Google in my opinion is scrambling although it may not appear on the surface to be the case.

    The traditional way to search is evolving and placed ads losing impact.

    Really, who clicks the side ads when looking for a plasma tv?

    Your going to click Best Buy or Circuit City in the search results because you have just seen an ad say on the tv or loyal or go to that brand because of past experiences.

    Check out the up and coming search service ChaCha. They are getting bites fishing and tbd if they land the big one.
    That is why they have been testing a search withing a search. "google" dynamic script and you will see what I mean.

    Google apps is a bust because if it needs explaining although free it just doesn't work.

    What I am saying for everyone out there is that is your parents can figure out how to use it then it's not that good a product.

    You don't thing that at Google they are scratching their heads trying to figure out why the free apps haven't taken over Saleforce.

    Look at this way, look at your kids toys and which sells better a finished working product with no instructions needed or the one you have to bring home and assemble?

    If the Microhoo deals happens and I think it will,
    they are not interested in search but now have the means to send you a lot of crap by e-mail and target more effectively. That is why Google is running audible plays right now.

    $600+ a share? I don't think so. Any money I can spare I will be buying Microsoft stock.

    It will be the one in 10-20 years that it will hit the $1,000 per share mark.

    It is along way away that someone comes up with an an embedded operation system that will bump them to the side.

    People have tried to give it free to get some of the pc market but again the problem is mostly all the software is built with Microsoft software.

    Last, the wildcard is when the web becomes a semantic web.

    There will be another Sir Tim Berners-Lee and the US pretty much is home base for the net now, time will tell if say Dubai or China etc. will be the first to build a new internet Super-Highway.


    Okay enough ramble.

    All the best from the Windy City,

    Pete
    romzine
    • Microsoft is the one scrambling here trying to figure out how to remain

      relevant. MS Office is way to bloated with old formating features for printing on 8.5 x 11 paper. Add to that literally millions of features that you do not need that you can accidentally turn on, and you have a shipwreck coming.

      I find Google Apps very refreshing, with all of the garbage stripped out. 99.9% of what we do is just enter text, set the font, insert figures, etc. Google Apps does that perfectly, and with instant (free) colaboration.

      I would be selling MS stock.
      DonnieBoy
    • I don't think so

      Who is trying to force people to move to a failed products like Vista? Who is losing their top minds to other companies like Google? Who has been fighting a losing online search portal battle with Google? Who is willing to pay 62% over the value of Yahoo's stock for a possible competitive edge over Google?

      Yes you know who.

      Your view on ads is also viewed through limited scope as well. Microsoft has bought ad companies such as aQuantive, ScreenTonic, Rapt, etc. If your analogy is correct then why are they spending billions of dollars buying these systems to waste money? Because there is value. There's a bigger picture here than you're seeing.

      Microsoft makes a boatload of money, that is for sure. Their star is Office. They released stats that Office 2007 is bringing in record profits. Google is looking to seriously hurt them in their pocketbook by distributing an Office product which they hope will be a killer app.

      If you look at their direction it almost seems like they've lost their way.
      Rude Union