(This post originally appeared on Forbes)
Say you’ve got a spare billion or so lying around and you want to buy a baseball team. Are you buying the team because of its fans? Its stadium? Its brand? Definitely. But why does the team have this value? Why are the fans coming to the games?
It’s because, at the heart of it, a valuable baseball franchise is all about its fan base and its fan base is all about its players. Ignoring the talent on the field will, over time, erode the team’s popularity. Its fans will disappear. Its stadium will empty and its TV ratings will fall. Don’t believe me? Just look at what happened to my Philadelphia Phillies after its 2007-2011 playoff run. The team – due to less talented players – painfully declined in all of these areas.
Which brings me to Google. And Salesforce.
It’s no secret that Google’s cloud division – which is trailing far behind its rivals Microsoft Azure and Amazon Web Services (AWS) – is looking to make a big acquisition in order to play catch-up ball. Now a new report from Business Insider claims that the company may be considering a purchase of Salesforce.com to fulfill this ambition.
At first, the idea – which is being floated by investment firm RBC Capital – has some attractive benefits. Salesforce’s cloud platform – Force.com – has been growing by double-digits as the company and its community continues to add users and build great business applications. Acquiring this community, and its related infrastructure, would almost immediately vault Google ahead of Microsoft to become the number two cloud based platform in the world behind AWS.
But for such an acquisition to succeed, Google would need to address a few enormous questions. Among them of course is the fate of Salesforce’s dynamic CEO Marc Benioff – a customer relationship management (CRM) and cloud pioneer – who has been an instrumental part of the company’s success and evangelist of CRM worldwide. But the more important question Google will need to address is the fate of Salesforce itself. Because, like a great baseball team, it’s the Salesforce applications that are drawing the fans.
That’s because the value of Salesforce is not its cloud infrastructure. Its value is that it’s a CRM company that delivers its world class solutions via a cloud infrastructure.
Salesforce’s brand is synonymous with CRM. Its stock ticker is CRM. Like Benioff, its leaders are also CRM evangelists. Its mission statement is “to empower companies to connect with their customers in a whole new way.” Salesforce has used its cloud infrastructure as a platform for its very passionate community to develop solutions for their customers, always with the intention (but admittedly not the requirement) of eventually connecting to Salesforce products.
When my customers are evaluating Salesforce, they’re not comparing it to Azure or AWS. They’re comparing it to other CRM applications. That’s because both Azure and AWS are modelled very different from Salesforce. AWS’s mission is “to enable developers and businesses to use web services to easily build and be paid for sophisticated, scalable applications.” Microsoft’s definition of Azure is “an ever-expanding set of cloud services to help your organization meet your business challenges.” These are not CRM companies. They are cloud service companies that host many applications, with some of them happening to be CRM.
Does Google realize this?
Does Google understand that, like the fans of a baseball team that come to watch great players, swallowing up Salesforce and prioritizing cloud over CRM would – over time – ultimately sabotage the very reason that attracted them? How long would it take for Google to start watering down Salesforce’s brand and neglecting CRM as it brings other, unrelated applications and its own search and advertising tools to the cloud platform it acquires? If this happens Benioff, an iconic entrepreneur and philanthropist, would likely not stick around very long under a Google regime. Neither would the passionate community that he built which underscores the success of Salesforce’s cloud platform.
Maybe Google knows this and doesn’t care. But it should. That’s because, like the fans of a baseball team that abandons its players, the very people that are the core of Salesforce’s cloud success will abandon their team if Google abandons Salesforce’s core CRM applications. It would be inevitable. I saw it happen, here in Philly.