2016 saw some major deals go down in the software industry. In fact, last year saw $115 billion in acquisitions closed or pending, according to data from Bloomberg. One of the big buyers in 2016 was Salesforce.com. But could Salesforce CEO Marc Benioff be on the other side of the table as an acquisition target by Google? Would a deal even be possible? Would a deal even make sense?
The Reason Why Google Buying Salesforce Makes Sense
There are always big mergers in tech, but 2016 was a record year with $115 billion in deals – up 19% from 2015. And 2017 could be an even bigger year for deals to go down. Only two months in, Cisco already agreed to buy AppDynamics, Inc. for $3.7 billion before the company was about to go public. But the biggest deal of 2017 could be Google acquiring Salesforce. Yes, Salesforce is a successful enterprise solutions company thriving at the moment. But there are a few reasons why this makes sense.
It starts with our new president. Trump’s administration has talked about corporate tax cuts and rewriting rules for businesses, meaning that companies would have significant;y more money available for bigger deals. Trump’s Treasury pick, Steve Mnuchin, said he wants to offer a one-time 10 percent “repatriation tax” to bring back corporate tax revenue back to the states, which would easily give Alphabet the funds to make this deal happen.If Trump follows through on that piece as he already has on his other campaign promises, this deal instantly becomes more likely. And since Arete Research Services noted that the price tag would be around $73 billion, the new legislation towards corporate taxes would be extremely helpful for Google parent company Alphabet to make the deal.
But there’s a bigger reason – Amazon.
Right now, Google is going all in on cloud services. But so is Amazon. Both companies want to go into enterprise cloud services. Amazon is currently the largest provider of cloud rental, which lets users rent storage and computing power. And Google has Google Drive, which integrates seamlessly into its Gmail, currently at over 1 billion active monthly users.
However, neither company has the enterprise solutions currently available on Salesforce’s platform. In addition to that, Salesforce has the customer base. By purchasing Salesforce for $73 billion, Google would be buying a huge client pool, and have instant access to powerful technology for its current account holders, including Google for Business. And because Salesforce isn’t involved in ads or internet searches, the deal is far more likely to clear antitrust hurdles than if Google were to acquire other internet companies.
Watch this video clip to know the overview of Salesforce:
Don’t be shocked if you see GoogleForce come about in 2017. It just makes too much sense.
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