Salesforce should have taken the money

Salesforce logoEarlier this year Microsoft offered $55 billion to acquire Salesforce only to be turned down by CEO Marc Benioff who countered with a $70 billion price tag.

It appears that Microsoft is not taking the snub lying down and is upping the competition against Salesforce’s most important product.

Beancounters at JP Morgan said that Microsoft is Salesforce’s biggest competitive threat in the cloud CRM market.

It surveyed vendors to ask what the biggest change you have seen in the competitive landscape facing in recent months?

Of the 56 vendors that participated, 23 percent of them said Microsoft. That’s way ahead of number two Oracle, which was only named by 11 percent.

Microsoft becoming more visible and competitive in the Cloud arena while others are stagnating, cited by 23 per cent of partners.

One comment said that Microsoft was closing some ground in terms of retooling their platform to what is now becoming a cloud-dominant computing space.

The survey asked only 56 Salesforce partners, but the survey reflects how Microsoft may indeed be closing in on Salesforce in the CRM space.

Salesforce is seeing much more competition from Microsoft Dynamics, which is going all cloud based and is significantly cheaper. Microsoft was winning some sizable CRM deals.

Microsoft only had 5.8 percent of the CRM market share last year, ranking fourth behind Salesforce, SAP, and Oracle. Salesforce was the leader with 16.3 percent market share.

Gartner has also said in its Magic Quadrant Survey that Microsoft Dynamics CRM is “experiencing renewed investment and focus within Microsoft,” and that it was the second most asked for CRM product in a global survey in the first quarter of 2015.

All this means that Microsoft is putting the thumbscrews on SalesForce by taking away its crown jewels. If it gets away with it, Salesforce might be forced back to the negotiating table. Either way, life is not going to be as good for Benioff as it has been.