Photographer: Krisztian Bocsi/Bloomberg

SAP Said to Have Held Strategy Talks With Salesforce in 2014

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The chief executive officers of SAP SE and Salesforce.com Inc. held discussions last year about possible strategic alliances between the two companies, people with knowledge of the matter said.

The talks also included a potential acquisition of Salesforce by SAP, said one of the people, who asked not to be identified because the negotiations were private. The discussions between Salesforce Chairman and CEO Marc Benioff and SAP CEO Bill McDermott began after Benioff contacted McDermott via telephone before SAP reported quarterly earnings on April 17, 2014, said the person.

“There is no truth whatsoever to the suggestion SAP is considering or ever did consider acquiring Salesforce,” said Nicola Leske, a spokeswoman for SAP. “Any such suggestion misses the point that salesforce automation is a 20th century solution to 21st century business opportunities.”

Chi Hea Cho, a spokeswoman for San Francisco-based Salesforce, declined to comment.

Marc Benioff, chairman and chief executive officer of Salesforce.com.
Marc Benioff, chairman and chief executive officer of Salesforce.com.
Photographer: David Paul Morris/Bloomberg

Salesforce, which has a market capitalization of $48.1 billion, is working with financial advisers to help it field takeover offers after being approached by a potential acquirer, Bloomberg reported Wednesday. Salesforce was prompted to work with the financial advisers by a more recent overture from a company other than SAP, another person said.

It couldn’t be determined whether there are currently any takeover discussions between Salesforce and Walldorf, Germany-based SAP. A takeover of Salesforce would be the largest ever for a software company. Acquiring the company would give any buyer a lead in the market for customer relationship management software, and credibility in cloud computing.

Industry Disruption

Safra Catz, co-CEO of Salesforce rival Oracle Corp., said this week that an acquisition of Salesforce by a competitor would be good for Oracle. “It’ll cause a lot of disruption in that market,” she said and declined to comment on whether Oracle was interested in the company.

Growth has been slowing in Salesforce’s main customer relationship management business, forcing the company to expand into other verticals such as marketing and analytics via a combination of acquisitions and new products. Oracle, Microsoft Corp. and other rivals have done the same.

Salesforce’s revenue rose 32 percent in the fiscal year through January, compared with 33 percent in the prior year, and 35 percent the year before that.

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