Microsoft walk away from trash-talking Salesforce

What looked like an unlikely deal due to the sheer size of both partners ended up being exactly that. But what can we learn from Microsoft’s refusal to stump up the alleged $70bn price tag for California software CRM giant Salesforce?

Classic Microsoft?
Microsoft made quite a name for themselves through their strategy of buying out competitors. Hotmail, Firefly, Bungie and Skype are just some of the names to have been bought out with Microsoft’s millions.

But even despite this exuberant history, and their $92bn deep pockets, this deal proved an acquisition.

Advanced talks
Despite the deal ultimately failing, what is surprising is how far talks progressed. It was already arranged, for example, that Salesforce CEO Marc Benioff would take up a management role within Microsoft after the merger.

Many, including Bloomberg’s Katie Benner, always thought a deal unlikely due to Benioff’s character being perceived as one unlikely to take backseat after his hands on leadership of Salesforce.

Salesforce Success
Benioff was not merely hands-on but successful too. Their Q1 performance was their best ever, with $1.51bn revenue, up 23% year on year. At the time, the CEO used their results to memorably smack talk rivals SAP, suggesting they “should try writing some software”.

While competition between Salesforce and SAP has been heating up, Benioff and Nadella have actually lead the way for a thawing or relations between Salesforce and Microsoft., with the two men now “routinely praise each other’s companies”.

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