Microsoft Corporation (NASDAQ:MSFT) is flush with cash. In fact, some may joke that it could buy a country with the $95.44 billion it has in cash, cash equivalents and short-term investments, and they may not be wrong. While we don’t exactly know how one would go about buying a country, we are sure companies often go acquiring other companies in complicated but commonplace deals if they have that kind of cash. Which brings us to reports that the software giant is studying whether to buy salesforce.com, inc. (NYSE:CRM) in a massive deal.
If one asks Dan Ives, however, he would rather have Microsoft Corporation (NASDAQ:MSFT) buy Salesforce than a country. In an interview on CNBC, the FBR Capital Markets senior analyst says that buying Salesforce would be a really good way for the firm behind the ubiquitous Windows operating system to use its cash trove.
“Salesforce is really to a machine at this point. I would view this as being run as part of the whole Azure cloud business. And if I look at Microsoft and the direction they are heading with Windows 10, they need to make a big move. This is one that would fit that strategy,” Ives tells CNBC, reacting to how hard it would be to integrate a company as large as Salesforce into Microsoft.
He also says earlier in the discussion that Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella needs to make an aggressive move on the cloud because this industry is really where he has bet the next five to 10 years for his company. A Salesforce acquisition would check all the boxes and make a ton of strategic sense, Ives says.
“I’m not really worried about integration given I see minimal overlap. In terms of the price paid, Microsoft has really [the] option here: ‘Do they buy a country or do they buy a company?’ They have so much cash and they need to make the aggressive move especially with others looking at Salesforce. They do not stand by. I view this as a golden opportunity for Nadella. This just shows that this is not Ballmer’s Microsoft. It’s a much different one that is aggressive […] This would really fit like a glove in our opinion,” Ives explains.
Microsoft Corporation (NASDAQ:MSFT)’s CEO said last week at the latest earnings report of the company that cloud may become a $20-billion revenue business by 2018.
Jeffrey Ubben’s ValueAct Capital owned about 74.24 million Microsoft Corporation (NASDAQ:MSFT) shares by the end of 2014.
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