Microsoft and

by Dustin Puryear

Yesterday, I commented on Andy Patrizio excellent blog about some potentially high-reward buy-outs/merges, and one of those was Microsoft and (Yesterday I focused on Dell potentially buying SGI.) I did some thinking about Microsoft and Salesforce and I like that idea even more than I like the idea of Dell buying out SGI.

Here is why:

• Microsoft is pushing into the whole SaaS world, certainly, but it is lagging behind. This is partially because it has no choice but to keep a lot of focus on its sources of income.
• definitely knows what its doing and is building a significant platform in the cloud on which to build future enterprise applications.
• is agile. Microsoft, alas, is not.
• is not OS-driven, it’s capabilities-driven.

All that said, if Microsoft, as it currently exist, were to buy or try to merge with Salesforce, then Salesforce would simply cease to exist. To counter this, Patrizio talks about Microsoft spinning off its low-end divisions and focusing on the mid- and enterprise-market.

I have to admit I am not so sure about that last part. Much of Microsoft’s advantage is based on the sheer number of users. It can leverage those numbers to get mindshare and to finance projects which begin with a loss but that can develop into new profit centers. So this would certainly be a HUGE gamble.

What do you think?


2008-07-24 06:39:25
Of course, while this might be a good fit, is already going steady with Google - probably because Google gets the whole Cloud thing.
Dustin Puryear
2008-07-29 19:02:50
Google does get the whole cloud thing.
2008-08-02 15:02:21
I find the biggest issue is in Microsoft cannabilizing itself with such purchases. Along the lines of, I find that in purchasing Salesforce is a step towards commoditizing Microsoft's most prized possession, the OS. Gambling in that direction should be an all or nothing stake. Otherwise, they'll get the worst of both worlds: a crappy capabilities-driven company and an eroded OS-driven company.
Dustin Puryear
2008-08-13 09:08:50

Joel's blog is very good. I don't read what he writes quite often enough.

Yeah, the OS is what muddies the water here. Microsoft seems to be pushing toward a less "Windows OS" centric approach in some ways, but at the end of the day that is where they get their money.