A Salesforce.com Acquisition Won't be a Firesale

Implications: • Salesforce.com offers a cost-effective vehicle for SMB companies to benefit from CRM software.
• Salesforce.com will come under continuing pressure from companies like Microsoft, Oracle, and SAP that are now seeking to establish their own on-demand presence.
• Salesforce.com could be an attractive acquisition target for these companies; if so, it will likely demand a premium, not a firesale, price.

Analysis: While I agree with the author's analysis that Salesforce.com will face increasing competition from enterprise application giants such as Oracle and SAP, I don't agree that Salesforce.com will soon be a CRM has-been.

Salesforce.com has successfully established itself in the small-to-medium (SMB) market and the company's success has been one of the proof-points for the software-as-a-service concept.  Salesforce.com has brought CRM capabilities to companies that simply could not afford to maintain their own computer infrastructure and did not have the requisite IT staff to install and maintain on-premise enterprise application software. 

Salesforce.com recognizes that it will face increasing competition. It is taking steps with offerings like AppExchange (which enables Salesforce.com partners to offer complementary on-demand applications), Platform Edition (for on-demand application hosting) and Salesforce SOA (to facilitate the integration of on-demand and on-premises software) to continue to make itself attractive to the SMB community as well as the developers that target the SMB community.

Furthermore, while companies like Microsoft, Oracle, and SAP are now more aggressively targeting the SMB market, they so not have the experience that Salesforce.com has.  If anything, these companies may decide to augment their own expertise by attempting to acquire Salesforce.com; if so, it will probably be a premium, not a firesale, price. While this may fulfill "the end of Salesforce.com" prophecy, it is not in the manner that the author envisioned.