Demand for Cloud Software has increasingly hit an all-time high across the globe, with more and more companies looking to invest thousands of pounds in Cloud technology. How long before the industry titans come looking for a piece of the action? Could Google potentially look to expand their dominance by acquiring Salesforce?
In the late stages of 2019, and continuing through to the starting stages of 2020, Google has made a statement of wanting to bolster its services and presence within the marketing cloud sector, with the aim to competitively compete against their biggest rivals by 2023. This three-year projection has been proposed by Google’s leaders, engineers and developers within the company.
In the current climate, Amazon Web Services currently hold around 47% of the cloud technology, while Microsoft Azure holds around 16% – leaving Google with a surprisingly small 4% of industry presence!
It’s no secret that Google’s Cloud services division is suffering, trailing far behind its rivals, so a purchase of Salesforce would allow Google to play catch up. A report from ‘Business Insider’ suggests that Google could make the massive purchase of Salesforce to start its cloud takeover.
With rumours now speculating, Google Cloud CEO Thomas Kurian could be looking for a boost within the sector. With this in mind, an acquisition for an industry-leading conglomerate such as Salesforce could be the push that Google needs to get ahead of their competition. Current predictions indicate that Google would need to set aside upwards of $250 Billion dollars (yes, we said BILLIONS) for the purchase of Salesforce. This would serve the company greatly with no-one else coming close to the power Salesforce currently has within the cloud market. Salesforce’s desire is to blitz their competition through SaaS (Software of a Service) growth, mixed with machine learning and Artificial Intelligence.
The benefit of buying Salesforce is accredited by their results, their market presence and record of experience.
The diversity of applications within Salesforce allows for centralised solutions across marketing, commerce and analytics, so their technology footprint would increase across SaaS with Google. This is what makes Salesforce so desirable. Salesforce’s cloud platform ‘Force.com’ has also been doubling in numbers as the company, and more importantly, the community continues to grow and build worthy applications/solutions for technology conundrums. This in hindsight would propel Google ahead of Microsoft, becoming number two in the cloud world.
How could Salesforce benefit from the acquisition?
Not only would Google make massive strides from the deal, but Salesforce would also secure additional financial resources to expand its cloud computing and global presence. It would all come down to CEO Marc Benioff’s stance on the matter, and his appetite to be acquired as opposed to continuing in making acquisitions of his own – like buying Tableau for $15.7 Billion in 2019. With this stance in the market, you could say Salesforce holds all the cards in the deal.
How could the deal affect the Cloud market?
With the potential deal coming true, how could this affect the market and other organisations? Microsoft could be put in a tricky situation as it’s chasing a partnership with Salesforce, so the concept of Google acquiring Salesforce could squander this partnership. Microsoft aimed to provide support for the CRM software provider, after it was awarded a massive contract with the Department of Defence to the Pentagon for the next 10 years, leaving them to question what avenue to pursue in order to fulfil this.
The main question for the big Cloud leaders is how do they want to structure their applications in the current market? ‘The application layer’ has become even larger in terms of revenue and profit – take a look at the estimates for each application by Gartner’s estimates.
With Salesforce having so much dominance in Cloud software – with CRM, Commerce, Marketing and Analytics (and much more), it could be impossible for Google to independently get a grasp in the market by building their own platforms. An acquisition of Salesforce by Google would propel both titans into the stratosphere as leading Cloud Providers, and the announcement of such a deal (and price) would certainly make for great marketing.
How possible is it?
Analysts and onlookers of acquisitions have been sensing a surge in the strategic acquisition by both Salesforce and Google. With the market and stocks continuing to grow, these conglomerate tech providers of the world must wage battle against each other to grow dominance. With the big fish eating up the little fish, even the bigger fish can be gobbled up for the right price, so any acquisition could very well be possible.