I’ve talked about many tech merges. This article will be different. Today, I want to talk about the tech merge that wasn’t.
This spring Microsoft and Salesforce have engaged in intense talks. Microsoft wanted to purchase Salesforce for $55 billion. Both sides failed to reach a deal. The reason? The price was too low. It’s rumored Salesforce CEO Marc Benioff wanted $70 billion. There was also conflict about Benioff getting paid in Microsoft stock, while other shareholders would have gotten paid in cash. But the Salesforce CEO would have had a major management role with Microsoft. It seems like Microsoft was a little reluctant as well. It’s believed Microsoft CEO Satya Nadella was reluctant about a deal of this magnitude because with such an enormous deal, will come enormous consequence. Salesforce is perhaps the leading software management and cloud company in the world. This would have been a perfect fit for Microsoft, well, according to most experts. Neither Microsoft nor Salesforce are commenting on the issue.
What made this the tech merge that wasn’t? One major factor had to be Benioff’s demand for 70 billion dollars. I believe in knowing the value and worth of your company. But to take it that far and want that much is going a little too far. Fifty-five billion dollars is not chump change, especially when it’s coming from one of the most successful businesses of all time. But if you’re going to ask Salesforce to merge, the least you can do is offer the CEO some cash. I’m not a negotiator, but the deal seemed doomed from the word go. Even Nadella felt that. But I’m not sad about this. If this merge happened, it would have killed a lot of competition and created a borderline monopoly. And remember what we learned in our high school economics class about the dangers of monopolies?