Duped By Linear Thinking
I feel like such a dope.
About once a year some rumor circulates about Salesforce being bought and speculation runs rampant for a few days about who the suitor is and what the likely scenario will be in the march to the altar. This week saw the annual festival. I never thought it was a great idea but there seemed to be a lot of smoking guns.
Bloomberg thought that the company was retaining bankers and all of a sudden we all just knew it could mean only one thing. But there are lots of reasons that a public company would do something like this and dealing with a potential takeover attempt is only one of them. A few weeks from now we might all be exposed for the linear thinking chumps that we’ve demonstrated we are. I have very little data (just my old friend logic) for what follows so it might even be true.
Another possible reason to retain bankers could be if a company is making an acquisition, which would be news of a different sort and still worth pursuing. But what would prompt this? After all, don’t companies buy each other all the time without engaging high priced bankers? Sure they do and Salesforce, by virtue of its high-flying stock could easily do deals for little more than a swap. So why engage the masters of the universe?
Well, how about an international deal, one in which a foreign company is bought in part or completely by Salesforce? In such a situation you’d want to ensure you crossed all the T’s and dotted the I’s in the proper format following all relevant laws and customs. We’re now getting warm.
Over the winter Salesforce and Sage made a joint announcement that Sage would begin migrating some of its accounting software to the Salesforce1 Platform. There was a news item but it didn’t get much play. Later, during Vice Chairman, Keith Block’s Boston Salesforce World Tour Event, he mentioned it casually and I wrote about it wondering how I could have missed it. But it wasn’t big news.
Then yesterday, after the markets closed by the way, I received a save the date email from Sage announcing a fireside chat press conference between Sage CEO Stephen Kelly and Salesforce’s Marc Benioff. It reads in part:
Hi Denis,
The world’s #1 small business accounting solutions company and the world’s #1 CRM solution and cloud platform for business are coming together for a fireside chat.
Please mark your calendar for May 13 at 12 p.m. PDT to listen in on a conversation between Sage CEO Stephen Kelly and Salesforce CEO and Chairman Marc Benioff.
Audiocast details to follow soon.
Just a conversation between two CEOs of different companies happening in plain sight, nothing special going on there! I bet they’ll have trouble getting an audience!
Hmmmm.
So, the logical deduction I am now making about Salesforce is not that they will buy Sage, frankly I don’t think it would be such a great idea. But I do believe that Salesforce will likely take a minority position in the company via some form of preferred stock that Sage would issue for the occasion. The purchase would give Sage some incentive (and cash) to continue porting its accounting products to the Salesforce1 Platform and it would give Salesforce greater access to some very specialized markets in construction and real estate for openers.
Is this the answer to all the speculation from earlier this week? I don’t know. But it seems more logical than the annual frenzy of buying Salesforce, which I wrote yesterday is far from likely.
When I queried Salesforce representatives about the possible takeover they had no comment as you’d expect of a well-managed public company. But I imagine the C-suite at One Market Street in San Francisco had few laughs at our expense this week.
To know for sure we’ll have to wait till May 13 and the fireside chat when all will be revealed. Or not.
See you there.
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