Microsoft denies it will buy Salesforce

Salesforce logoMicrosoft is not trying to buy Salesforce and has sent its deep throats to leak messages to the press that it is not true.

Bloomberg News, citing people with knowledge of the matter, reported earlier this week that Microsoft was evaluating a bid for Salesforce after the it was approached by another unknown buyer.

But off the record Vole considers Salesforce’s current market valuation too expensive. Sources within Microsoft say that the company could review a bid for Salesforce in the long term, but not at the moment.

Salesforce is No. 1 in the $23 billion-a-year customer relationship management (CRM) market, according to tech research firm Gartner. It helps corporations organise and track sales calls and leads.

Salesforce’s services are entirely provided over the cloud, with no software directly installed on PCs. Oracle (ORCL.N) and Microsoft, which were relatively late to the cloud model, have much smaller online CRM revenues.

Vole and several other big software companies are seeking to beef up their presence in cloud computing and so picking up Salesforce made sense.

However Salesforce’s shares, which have risen 48 percent in the last 12 months, trade at 106.8 times the company’s forward earnings, well above Microsoft’s multiple of 19.1.

SAP Chief Executive Bill McDermott said earlier this week his company has “zero interest” in its software rival.

“We have never bought something that was impaired and in decline,” he said, saying that Salesforce’s cloud computing software was becoming commoditised.