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Report: Microsoft Made $55 Billion Bid To Acquire Salesforce, But It Wasn't Nearly Enough

Salesforce CEO Benioff turned down Microsoft's $55 billion acquisition bid because it was far less than the price tag he had in mind, according to a report from CNBC.

Microsoft offered $55 billion to acquire Salesforce earlier this year, but that wasn't enough to get Salesforce Founder and CEO Marc Benioff to agree to a deal, CNBC reported Friday.

CNBC, citing anonymous sources familiar with the talks, reported that Benioff wanted $70 billion for Salesforce, which currently has a market capitalization just above $49 billion.

According to CNBC, Microsoft's bid would have allowed Benioff to convert his 5.7 percent stake in Salesforce into Microsoft stock, and Benioff would have assumed a management role at Microsoft. Others shareholders would have gotten cash for their Salesforce stock.

[Related: 5 Reasons Why Microsoft Just Might Be Salesforce's Secret Suitor]

Bloomberg reported April 29 that an unnamed company had approached Salesforce about an acquisition, and Salesforce had hired financial advisers to either fight them off or facilitate a deal. The report set off a wave of speculation about the identity of the secret suitor.

SAP, Microsoft, Oracle, and IBM were the primary suspects, though they all in the following weeks distanced themselves from acquisition rumors. SAP CEO Bill McDermott did it most bluntly, telling an audience the German software maker had no interest in Salesforce's "commodity" products.

But it seems that representatives of Benioff and Microsoft CEO Satya Nadella—two passionate cloud advocates recently seen buddying around at Microsoft's Build and Ignite conferences—discussed hooking up for what would have been the largest acquisition in the history of the software industry.

Salesforce partners who spoke with CRN on Friday mostly downplayed the whole drama.

Andi Giri, managing director of the Salesforce practice at Softsquare, a solution provider in Silver Spring, MD., said a merger probably wouldn't have had much effect on his business.


But larger Salesforce partners might be impacted, Giri told CRN, "because of the acquiring company's partner alignments taking a significant piece of the pie."

Salesforce is the "crowned king" of the SaaS world, much like AWS on the IaaS front, Giri said, making the San Francisco-based company so attractive to potential buyers.

"Any of these companies would greatly gain from a cloud technology standpoint if they acquire Salesforce.com," he said.

While Microsoft's Azure is a good Platform-as-a-Service, the software giant's Dynamics CRM and SharePoint "are not fundamentally built for the cloud" like the Salesforce Sales, Marketing and Service clouds are, Giri said.

And Oracle and SAP are "dragged by their own weight," Giri said. "Oracle's Sales cloud smacks of legacy architecture and is difficult to customize, when compared to Salesforce."

With Oracle's Siebel, SAP's CRM, and Microsoft Dynamics all "lagging way behind in sales, either of them would be able to beef up their CRM application stack if they acquire Salesforce.com," Giri told CRN.

Eric Berridge, CEO of Bluewolf, a global Salesforce partner, told CRN that an acquisition won't change the fact that Salesforce is the global CRM leader.

"Customers will still expect them to deliver on their core strengths, which have always been superior customer success, marketing, employee engagement, and philanthropy," Berridge told CRN via email.

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