The cloud-computing market may get hotter this year as Salesforce.com appears to be paving the acquisitions road. The enterprise cloud-computing company last week moved to raise $500 million, adding to its billion-dollar cash reserves.
Since then, speculation has been fierce about what the company plans to do with the money. Some are betting Salesforce will scoop up e-mail marketing-software company Constant Contact. Others are predicting the firm will acquire the likes of a SuccessFactors or Taleo. Still others expect Salesforce to purchase RightNow.
“Salesforce is sitting on a war chest right now,” said Charles King, principal analyst at Pund-IT. “The consensus of opinion seems to be that the company may be planning to pick up some additional Software-as-a-Service vendors. But that really depends on exactly how much money they want to pay and whether they are trying to consolidate their hold in the CRM/SaaS base.”
Moving Into Business Social Networking
A less-discussed but more intriguing concept to King pictures Salesforce expanding its position in business-centric social networking. Salesforce.com CEO Marc Benioff said late last year that the company was looking to grow its revenues from $1 billion to $10 billion over the next few years. The company only reached the $1 billion mark a year ago.
“That type of market growth suggests to me that they are taking on this extra debt to make some sort of dramatic play. Simply consolidating by bringing more existing SaaS vendors into the Salesforce tent is not what I would think of as a dramatic-enough move to really spark that growth,” King said.
“Whenever the economy hits tough times or uncertain times, it creates interesting consolidation opportunities, and certainly SaaS and social networking are areas where I think there are some intriguing smaller companies.”
Still, SaaS consultant Bob Warfield thinks it’s about time the SaaS world did some acquiring. Salesforce.com, he…