I held Salesforce stock from 2016-18 and it helped us just buy our first home. They have incredible lock-in with a very large and diverse customer base. They now have to defend themselves against Google's purchase of Looker, and the rise of PowerBI.

Are they serving the same market as Google? It seems as though the two are serving different use cases, both of which need data viz. Salesforce gives you a sales database and a front end out of the box, and you can tweak it and add to it with add ons. Google gives you compute and storage, but the application logic is all owned by you.

That's what makes this seem like a strange deal to me. There's pretty much 0 overlap with Google on CRM, and the next comparable tech stack that does compete with them is MS Dynamics CRM combined with Power BI. But Dynamics doesn't appear to be a growing threat for CRM marketshare.

That said, Salesforce (based on my usage ~4 years ago) has truly awful baked-in BI and analytics, necessitating third party products and data engineering to fill that gap. Tableau will fix that, but I'm staggered at the price.

Salesforce is a sales organization par excellence. They sell whatever they have, be it social media monitoring, CPQ, marketing automation, Heroku, Jigsaw data, IoT etc. they develop deep wallet share in large accounts and are constantly cross-selling. Their core audience is business people, and that is in stark contrast with GCP which is almost entirely dev focused. I’m not saying CRM is an afterthought but they have plenty of accounts that don’t use their CRM.

That said, Google has deep inroads with their apps suite, and it’s really a race to have their tech run business processes. That and their ecosystem like Insightly are making big inroads to CRM’s SBM market.

Their analytics is shit, but I think the important thing here is that they know their audience very well, and business people love Tableau.

They bought $15B worth of sales leads for cross selling their portfolio of services.

So is Google making a play for Saleforce’s core business? I don’t know a lot about the details of what Salesforce does but from my view it looks like there is not that much overlap

As I think about it, I don't see this as a play for business or much of direct competition at all, they simply both had strategic gaps, but for very different reasons, in their BI/Analytics offerings.

Good points, it's easy (well for me it was) to overlook gradual expansion beyond the CRM sphere.

Interestingly, I think an earlier version of the title had "in all-stock deal", but I think the mods removed it. I wish they hadn't, as that's an important detail for the reasons you mention. (Also, ask James Baker, who was convinced by Goldman Sachs to sell Dragon Naturally Speaking in an all-stock deal ... of a company that turned out to be the Belgian Enron.)

I was in speech recognition tech during that time. It all tanked, but Dragon got screwed the hardest. ScanSoft (now Nuance) made out like a bandit with all the tech fire sales post-bust.

Yeah, I can't imagine how Baker (and all the employee-shareholders) must have felt about being advised not to do the standard half-cash-half-stock purchase and then turn out to be a fraud so soon.

Yes, the title of the post was changed after my comment.

My guess is that Salesforce was also in the race to acquire Looker, and since that fell through they picked up Tableau because they had sunk the work into acquiring a data visualization company. The timing is uncanny, but the price tag is vastly different.

Few if any institutional investors are looking at CRM on a P/E basis. They're valuing the company usually on EV/Sales and EV/FCF.

That's a strange claim.

First, how do you know what all institutional investors are thinking?

Second, Sales and FCF straddle Earnings on the income statement. A focus on EV/Sales suggests that investors are optimistic about growth and ignoring the spending required to get there. A focus on EV/FCF suggests that investors are optimistic about increased efficiency and cutting costs.