RSSsalesforce.com will be acquired in 2007 – IDC
IDC blog has a post highlighting one of their predictions for 2007. Salesforce.com will be acquired in 2007. We believe the growing importance of online delivery of software and business services will make salesforce.com (and particularly its AppExchange hub) a very tempting target to both large players (like IBM, SAP, Oracle, Microsoft) still struggling to scale down and move online, and consumer-heavy players (like Google, Yahoo!, AOL) trying to "scale up" to the business market as a way to further monetize their online presence.
In the post they go on to list the five core market premises underlie this prediction:
SaaS is strategic. Developing SaaS capabilty (and SaaS' merging with/morphing to online business service delivery) is clearly becoming a critically important capability for the future of "traditional" software and services vendors
The platform and ecosystem are the strategic core. While salesforce.com isn't the only SaaS player to consider for acquisition, it is arguably the most visible one; and its development of the AppExchange/Apex platform and ecosystem is arguably the most strategically valuable
Acquisition is (relatively) fast & easy. Acquisition (vs. organic development) will be the fastest way for at least some of the key players to develop a SaaS platform and ecossystem.
Everything's for sale. Salesforce.com management may not be interested in selling, but – let's face it – all companies are for sale, at the right price.
"Disruptors" are more likely buyers. more likely buyer category would, in my view, be the online players who don't have the complicating legacy middleware commitment.
What do you think ?
Source: 1
Prashanth, thanks for posting this. As the CEO of LucidEra (a SaaS Business Intelligence company), I’d like to share my thoughts about two of the core market premises discussed in this post. First, regarding platforms, SaaS companies with strong, open platforms are the most tempting acquisition targets. Traditional vendors don’t want to throw away everything they’ve done when switching to a new business model. The advantage of buying a SaaS company that has a strong platform is that it gives the acquiring company the potential to redeploy some of its existing application knowledge onto this new platform. Second, the premise that acquisition is fast and easy is short-sighted. Yes, the physical act of buying the SaaS vendor may be easy, but a huge amount of effort and focus must be placed on integrating the acquisition. In fact, since the SaaS business model is at odds with the traditional enterprise software model, much more energy and thought must be put into the integration. If done poorly, the acquired SaaS vendor will create a civil war inside the acquiring company, and both will suffer (e.g. Siebel’s acquisition of UpShot). The acquiring company needs to be ready to make structural and cultural changes to make the move to SaaS successfully.