Microsoft Corporation Not To Bid For Pricey Salesforce [REPORT]

Microsoft Corporation Not To Bid For Pricey Salesforce [REPORT]
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Microsoft is currently not looking to acquire Salesforce, says a report from Reuters, which cites sources familiar with the matter, thus crushing all speculations that the software giant is looking to bid for the cloud software company. Earlier this week, there was a report in Bloomberg indicating that Microsoft was considering acquiring Salesforce.

Microsoft finds Salesforce expensive

Microsoft is, however, convinced that the current market valuation of the company is expensive, but in the future, there could be a possibility that the software giant reconsiders Salesforce a potential acquisition target, says the report.

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Salesforce, with a market cap of $49 billion, seems to be an expensive bet. Shares of the company spiked 48% in the last 12 months and trade at 106.8 times the company’s forward earnings, above Microsoft’s multiple of 19.1, according to Thomson Reuters.

Salesforce is the largest company in the $23 billion a year customer relationship management market, noted research firm Gartner. The firms in the CRM marketassist corporations in organizing and tracking sales calls and leads. The CRM player provides its services over the cloud without the need to install any software.

As of now, there is no comment from either company on the matter.

Potential bidders for Salesforce

Oracle and Microsoft were the late entrants in the cloud model, and thus have smaller online CRM revenues. Therefore, not just Microsoft, but other companies are also looking to enhance their presence in cloud computing.

Oracle Chief Executive Safra Catz stated last month that her company could be on the brighter side if Microsoft or another rival bought Catz said, “It would cause a lot of disruption in that market and so I would view that as something that would be helpful to us, especially in the short or medium term, dependent on who it was.” However, she did not reveal if Oracle was interested in buying Salesforce.

SAP SE, which was seen as a potential bidder, turned down all the possibilities when Chief Executive McDermott said earlier this week that his company has “zero interest” in the software rival.

Salesforce, on the other hand, is reportedly working with financial advisers to hunt for potential bidders and give out an apt response according to Bloomberg.

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