When Do The SaaS Acquisition Games Begin? (A Primer on Cloud Computing Market Segments) « SmoothSpan Blog

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The Yahoo/Microsoft business has turned to utter farce. Michael Arrington’s line left me in stitches:

Mathew Ingram calls it “desperation squared.” We have now moved from the factual to the sublime: a sure signal to Yahoo that they need to get on with being acquired. When most of the world is laughing at you, and you are a huge company, it means you’ve lost it. You’re way past the point of return. But this is not why we’re here, for the Giants are thinking of dipping into another branch of the Cloud Computing Tree.

Tom Foremski says that Oracle recently approached Salesforce.com to gauge their interest in a possible $75/share offer. Duncan Riley at Techcrunch finds the rumor plausible, as do I. I won’t spend a lot more time on this particular scenario. It will be a question of Oracle’s resolve to buy versus Salesforce’s resolve to remain independent. But I will say this. Oracle typically spends 7-8x maintenance revenue to buy companies. If the rumor is true, they’re offering 13x trailing twelve months total revenue for Salesforce. It just goes to show the awesome financial power of a good SaaS business. It’s likely worth that much. After all, if Oracle is ever going to get started on the road to SaaS (yes, I know, they have a SaaS business already, yada, yada, but not really), starting from a seed as close to $1B a year as possible would help accelerate things. That’s a real problem, BTW: there just aren’t all that many SaaS properties out there yet for acquirers to choose from. The space isn’t very far along, and is still very young.

And yet there are machinations going on as various players try to position themselves for the coming battles. Some of these manuevers are visible, some ...

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http://smoothspan.wordpress.com/2008/02/12/when-do-the-saas-acquisition-games-begin-a-primer-on-cloud-computing-market-segments/

http://smoothspan.wordpress.com/2008/02/12/when-do-the-saas-acquisition-games-begin-a-primer-on-cloud-computing-market-segments/