Is Microsoft or Oracle a Better Fit For Salesforce?

For some of the older generation of technology titans, the transition to cloud-based software as a service (SaaS) is proving to be a difficult leap to make.

An Salesforce acquisition could be the answer to a lot of technology executives' prayers.

All the big names have skin in the game: Microsoft, SAP, IBM, HP, Cisco and Oracle. None of them can fail to ignore the younger generation of giants, such as: Amazon, Google, and Salesforce. All of which are more comfortable innovating within the cloud, an ecosystem they helped build. Whereas the legacy players are transitioning into this space, which for some, is proving to be a challenge.

According to the business and tech media, Salesforce is fielding acquisition offers from Microsoft or Oracle, or both, which would be a game changer in the cloud space. A boilerplate pinch of salt warnings aside, this rumor seems to have a fire, given all the smoke around it.

The question is, who would be the better fit: Microsoft or Oracle?

With either, a merger of this size would be a costly and complicated process, so neither customers or shareholders should expect to reap the benefits any time soon.

The risks, however, to whoever loses this fight to win the cloud could be game changing. As in, to the victor, the spoils; and the loser, it could be game over.

Multi-billion dollar business empires could fall and crumble. Some of the big names, particularly legacy players, could pass from our stock markets and into our history books. Even younger giants would face a serious threat from whoever takes the prize which is Salesforce.

The Oracle Advantage

Salesforce comes with two immediate wins: $5 - 6 billion in annualized cloud-based revenues and CEO Marc Benioff. Along with millions of users and over 100,000 customers of their most popular product, the Sales Cloud (‘the world's #1 CRM application’).

Leveraging the power of their ecosystem - which includes a service cloud, dozens of enterprise app integrations, analytics (Wave), marketing and developer tools (Salesforce1 Platform) - would produce enormous upsides for any prospective buyer.

Getting Benioff back at Oracle, where his career started, could solve the question of who succeeds Oracle’s chairman, Larry Ellison. There is no doubt that Benioff would be the ideal candidate: both men are larger than life leaders, and charismatic enough that others would gladly follow into battle. Further, the synergies would be far simpler with Oracle since Salesforce is built on Oracle database technology.

This acquisition is more affordable for Microsoft but comes with greater challenges. Either buyer could simply shut Salesforce down after an acquisition in order to give their solutions a fighting chance in the market, but that seems highly unlikely. More likely is whoever buys Salesforce will finally have the product, talent, and cash flow to make them a force to be reckoned with in the cloud, now and in the future.