file:///Users/thomasallenpaine/Desktop/EKCWcIgX0AACcUq.jpg
Tom Paine
I’ve been wondering for some time whether Salesforce’s (NYSE: CRM) growth would falter, but it really hasn’t yet in a big way. Though a string of acquisitions have had a dilutive effect, investors have rewarded it with a growth premium in terms of a higher Price to Earnings (PE) ratio. Its somewhat akin to what happened last year when Netflix briefly surpassed Comcast in market value. Such a PE advantage, though tenuous, gives Salesforce a strong currency for acquiring others.
Salesforce may be on the verge of becoming a more powerful enterprise player than the possibly capital-constrained SAP, under pressure from an activist investor, in spite of its considerably smaller revenue & profit base.
Comparative share prices: Salesforce (light blue) vs SAP (dark blue) Past 5 years

CRM Mkt cap | $146.8B |
SAP SE Mkt cap | $162.4B |
In 2018, SAP redesigned & retargeted its CRM, but its way too early to measure how effective that relaunch has been.
SAP CRX ( Qualtrics): The acquisition of Qualtrics opens up an adjacent market to CRM that Salesforce isn’t much of a player in today.
Salesforce could move more into SAP’s space:
Salesforce Options
- Buying WorkDay would appear financially feasible, though WDAY founders control voting stock (they won’t allow another Peoplesoft). WDAY brings Financial ERP as well as HCM.
- Continue partnerships or consolidate RootStock & Financial Force (manufacturing & financial ERP)
- Buy Zoho if available. Threat to cannibalize Salesforce’s own core business, but could be like Microsoft’s Great Plains acquisition
Salesforce acquisition target list leaked in 2016 – What’s happened since

Adobe Mkt cap 134.91B, essentially the same as CRM
LinkedIn . Acquired by MSFT for $26.2 billion
Workday . Mkt Cap $39.9 billion
ServiceNow . Mkt Cap $50.8 billion
Netsuite . Acquired by Oracle for ~$9.3 billion
Tableau Acquired by Salesforce for $15.7 billion
Pegasystems . Mkt Cap $5.7 billion
Qlik Acquired by Thoma Bravo for $3 billion
Veeva . Mkt Cap $21.7 billion
Box . Mkt Cap $2.6 billion; Recent activist stake
Demandware . Acquired by Salesforce for $2.8 billion
Zendesk Mkt Cap $8.6 billion
Marketo Acquired by Adobe for $4.8 billion
Hubspot . Mkt Cap $6.8 billion
Salesforce’s Mulesoft acquisition last year was totally off the chart. SAP owns no equivalent.
Salesforce needs to decide whether to build a strategy around smaller customers, or double down on larger customers.
Salesforce is also likely looking at ways to accelerate its CRX ambitions.
Another possibility is a dead stop to Salesforce’s organic growth, but that seems unlikely given the size and projected growth of the market
Not discounting Oracle at all, but see it more as a hard engineering company, inconsistent in end user applications.