Buying the cloud-based, customer-service software maker could make businesses less likely to ditch Office. It might, however, cost Microsoft about $60 billion, a greater sum than it has spent on all its previous deals combined. A bold bet for boss Satya Nadella would create earnings dilution that irritates his shareholders.
Nadella essentially made his name at Microsoft by successfully expanding its cloud wares. Since ascending to the chief executive role last year, he also has stressed how important they are to the company's future. It's faster, simpler and often cheaper to use software over the web than to install it on individual computers. Microsoft's online version of the Office suite, its Azure platform and related applications for companies are already selling $6 billion worth annually and growing at a rate of more than 100 per cent.
Though the company keeps losing its edge with retail consumers, its lock on corporate customers looks strong. Many companies also have organised their marketing efforts around Salesforce's software. Add it to Office, other online applications and lots of free memory, and businesses would have an even tougher time abandoning Microsoft.
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That would almost certainly be unpopular among the big funds that own Microsoft for its ability and willingness to return capital. Investors betting on growth in the post-Steve Ballmer era may be equally confused. Salesforce would add only about 1 percentage point to Microsoft's top line this year. Figuring out how to keep customers and talented coders while integrating the two companies would add complexity and concerns. Ultimately, a deal to make customers stickier might be very sticky indeed for Microsoft.