Consultants Instruct Google, Buy Salesforce.com… Now
May 31, 2008
eWeek ran a very interesting story “Analysts to Google: Buy Salesforce.com“. The article, written by Clint Bolton, ran on May 30, 2008. Please, read it before it gets sucked into the innards of the sprawling eWeek Web sites.
The point that jumped out at me is this statement:
The 451 Group report comes amid belief that Google could buy SAAS BI provider Panorama Software. But like Google’s previous App purchases, including Postini, buying Panorama would be the equivalent of bringing an axe instead of a chainsaw to chop down the great oak in the enterprise app forest: Microsoft. “If the search engine wants to be an enterprise player, it needs to buy big,” Daly and Martens concluded. “And in acquiring Salesforce.com, Google would finally have a true platform, one that could help it go after not just Microsoft Office but also content management, business intelligence and other offerings.”
A client asked me to think about this problem several months ago. Based on the research this lame duck conducted, my conclusion was that Google strikes like a mongoose when it wants to buy a company. If the acquisition is a strategic one like the Keyhole buy that ignited Google’s geospatial business, the decade old Google acts like a two year old shark–quick to move. The Keyhole deal dinged Microsoft, a company poking around the Keyhole technology tool. One source told me that the Google deal left a gap that Microsoft rushed to fill with technology from a Rochester, NY, company. True or false, Google got its product out the door in about four months. Now I can’t watch a news story on TV without seeing Google’s talon scratches on the television maps.
Therefore, as much excitement as the 451 Group’s report will engender, I’m not sure Google pays much attention to suggestions from outside the company even when Google pays the contractor to make them. Also, some of the data I reviewed suggested that Google may be playing a different game with Salesforce.com.
Let me offer my interpretation of my reserach data and invite you to push back via the comments funciton on this Web log.
- Google has been dating Salesforce.com for several years. In fact, one Googler told me, “We really like those guys.” But since I heard this statement over 24 months ago, Google continues to date Salesforce.com. A marriage is a possibility, but I think Google is in dating, not marriage, mode. This can change, but the pace with Salesforce.com is different from Google’s velocity with other targets.
- The Salesforce.com core technology pivots on its multi-tenancy methods. The idea is that many different clients each with many different users can access the Salesforce.com system with confidence that data don’t seep from one customer to another. As nifty as this virtualization technology is, Salesforce.com has Oracle at its core. So the technology of Salesforce.com is good, but it is not Googley.
- Google is the key player in cloud computing. Amazon, eBay, and maybe Salesforce.com don’t understand this. Every time a Googler dates a Salesforce.com professional, Mother Google is watching to learn. The increasing density of the Google-Salesforce.com tie ups–some without much if any financial strings attached–allow Google to absorb information. If the received data signal a buy out to Mother Google, Google will take a stake in Salesforce.com, maybe buy it. But if the data flash yellow or red, Mother Google will take steps to cool the relationship.
My research suggests that Google can indeed fix the serious, technical ailments of Salesforce.com. Google is giving up little freedom with its present relationship with Salesforce.com and it doesn’t have to get its fingers dirty in the technical plumbing at Salesforce.com.
My analysis of the Salesforce.com technology identified three potential flaws in the company’s sleek, sales-oriented exterior. The major challenge at Salesforce.com is brittleness. Like Amazon, these firms’ engineers have found ways to keep the Oracle database at the core of the system from turning nasty. Too many transactions shoved into the Oracle RDBMS maw, you will have the system bite you hard on the ankle. You could lose a foot with a cranky Oracle database.
For the time being, I think Google’s present “dating” approach to Salesforce.com benefits both firms. Google keeps it options open. Salesforce.com gets direct access to Googlers which is not something companies enjoy. My research suggested that as of March 31, 2008, both companies believed their relationship was a good one.
As you can tell, I don’t think that the 451 Group’s suggestion will change many minds at Google. But it would be a great payday for Salesforce.com shareholders, zing Microsoft with the Google taser, and create a lot of complicated engineering work for Google engineers.
The good eWeek write up provided me with the information I needed. I will not buy this 451 Group report.
Stephen Arnold, May 31, 2008
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