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The Oracle-Salesforce acquisition rumors: Could we see One Cloud to rule them all?

Omar Akhtar
Salesforce CEO Marc Benioff Keynotes Dreamforce Cloud Computing Event

No matter how big you get as a company, here's a stark reminder that there's always a bigger one waiting to eat you up.

Yesterday, Bloomberg broke the news that Salesforce was working with financial advisors to help figure out its options after it was approached by a potential acquirer. Salesforce's stock jumped 11 points at the news, and the Twittersphere was immediately rife with speculation. 

Salesforce currently has a market cap of nearly $50B, so there's really only a handful of companies who have the resources to buy it. In fact, it would be the largest amount of money ever paid for a software company. Microsoft certainly has the cash to execute such a takeover, and its new CEO Satya Nadella has been openly playing nice with Salesforce CEO Marc Benioff with CRM partnerships (and cheesy photo-ops.)

However, the smart money is on Oracle, the company Benioff left to form Salesforce, and the competitor he gleefully likes to poke in the ribs whenever he gets a chance. What makes Oracle such a likely buyer (other than its $43.8B cash war chest) is its drive to dominate the cloud computing industry. Oracle was famously late to the cloud and while many cloud computing platforms are built on its technology (Salesforce is one of them,) Oracle has been slow in pushing out quality cloud solutions of its own. Acquiring Salesforce would immediately give Oracle a huge boost in the computing world, not to mention access the Benioff's visionary leadership, and a slew of industry leading cloud solutions.

In a research note from FBR Capital Markets and Co, analyst Daniel Ives says Oracle has everything to gain from a takeover. "We view this more as Oracle trying to make a bold, decisive move to stake its claim in the cloud before it falls even farther behind," says Ives. "We believe a 'game changing' acquisition of salesforce.com would fit right into Oracle's wheelhouse as it could help accelerate the database stalwart's painful cloud transition (e.g., move to subscription-based model) and leap-frog SAP's latest attempt to surpass Oracle's cloud offerings through the acquisition of Concur."

If we focus purely on marketing tech, an Oracle-Salesforce merger could potentially create an uber-marketing cloud as each company uses the other to plug the holes in its offerings. Salesforce has ExactTarget and Pardot for marketing automation, and Buddy Media and Radian6 for social. Oracle has two heavyweight marketing automation platforms in Eloqua and Responsys, but crucially it has BlueKai, one of the biggest third-party customer data repositories in the business. What Oracle lacks in the social department, it could make up with Salesforce and support it with analytics from BlueKai, creating an extremely potent set of offerings. Put marketing together with the rest of the cloud solutions across both Salesforce and Oracle (including HR, CRM, service, web management) and we could be seeing the most comprehensive, end-to-end solution enterprise software suite in the market. This vision would be extremely desirable to customers of both platforms, who would have access to a single, unified ecosystem of products for all their enterprise needs.

However, keep in mind that at this point, it's all idle speculation. Even if Oracle was to takeover Salesforce, the amount of technological wrangling it would take to completely integrate all the solutions into a coherent enterprise offering could take years. But given how possible industry insiders think the acquisition is, customers and competitors alike might find it worth examining its impact sooner, rather than later.