Salesforce.com and Google are considering a relationship that could see the firms work more closely together, according to an article last week in the Wall Street Journal. The suggestion of a tie-up was popular and a leading analyst even suggested that a merger could make sense.
The alliance could help the pair compete better with Microsoft, the Journal article argued, although it added that the firms were “still hashing out details of a potential partnership”.
Although details remain very sketchy, even the notion of a tie-up was enough to see Salesforce’s shares rise sharply, and for pundits to suggest that an alliance could help Salesforce’s challenge to enterprise applications giants SAP and Oracle, as well as boosting Google’s ambition to create an alternative to Microsoft in client applications.
Google and, uncharacteristically, Salesforce declined to comment.
Salesforce chief executive Marc Benioff has long been a supporter of Google, frequently showing off the search giant’s applications as support for his contention that computing is moving away from reliance on in-house IT infrastructure in favour of a web-based model.
“I know Marc has been a fan of Google, which you would expect given his ‘end of software’ message,” said Craig Sullivan of NetSuite, a company that offers web-based business applications. “It makes sense for any web-based application vendor to work with any other web-based application vendor but our perspective is that this story sounds very similar to what everybody does with Microsoft Office.”
However, a more formal alliance could give Salesforce the support it needs to compete with much larger firms such as SAP and Oracle as it seeks to build a broad on-demand application platform, while threatening the chances of other software-as-a-service (SaaS) vendors from overtaking it.
Ian Campbell, chief executive of analyst firm Nucleus Research, went further, saying that Google merging with Salesforce could give the latter more muscle to compete with its much larger rivals.
"I'm betting Google buys Salsesforce. Then the question for the customer becomes, ‘who do I trust more to deliver an on-demand enterprise application, Google or Oracle?’."
Microsoft head of platform strategies Nicholas McGrath said: “It’s not inconceivable [that Google and Salesforce could work more closely] because the platforms are both web-based, but they’re not in the packaged software business. Google is throwing stuff at the wall but how much is sticking?”
