How Microsoft Responded to Salesforce’s Objections
Microsoft aims to thwart Salesforce’s CRM dominance
So far, we’ve discussed how Salesforce (CRM) has raised objections about the Microsoft-LinkedIn deal. Before Microsoft (MSFT) made an offer of $26.2 billion for LinkedIn (LNKD), Salesforce submitted a bid for the company. Though Microsoft outbid Salesforce, Salesforce pushed Microsoft to raise its price for LinkedIn.
Salesforce, not the one to sit quietly and let the Microsoft-LinkedIn deal happen with ease, pressed regulators to look into the deal. Burke Norton, Salesforce’s chief legal officer, stated, “We intend to work closely with regulators, lawmakers and other stakeholders to make the case that this merger is anticompetitive.”
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Let’s look what Microsoft said in response to Salesforce’s objections about its LinkedIn acquisition. According to The Business Journals, Brad Smith, Microsoft’s president and chief legal officer, said, “Salesforce may not be aware, but the deal has already been cleared to close in the United States, Canada, and Brazil.”
Smith further commented on Salesforce’s dominant position in the CRM (customer relationship management) space, stating, “We’re committed to continue working to bring price competition to a CRM market in which Salesforce is the dominant participant charging customers higher prices today.” The above-mentioned statements by both companies indicate a growing rivalry.
Salesforce is the CRM leader
Salesforce continues to lead the CRM space with a 19.7% market share, as the chart above shows. It’s followed by SAP (SAP) and Oracle (ORCL), which held 10.2% and 7.8% of the market, respectively, in 2015. Microsoft and Adobe (ADBE) are the other leading players in this space.
In the global CRM market, Adobe rose the fastest. Its revenue rose 26.9%, while Salesforce and Microsoft reported revenue rises of 21.1% and 20%, respectively. The recent acquisition announcements by Microsoft and Oracle of LinkedIn and NetSuite, respectively, demonstrate these companies’ ambitions to scale up in the CRM space.
Though Salesforce leads in the CRM space, Adobe and Microsoft pose growing competition and threaten its leadership.