Salesforce will likely end its $5 billion buying spree this year, but its rivals won't

Business Insider | 1/10/2017 | Eugene Kim
cyanbyte (Posted by) Level 3
Click For Photo: http://static3.businessinsider.com/image/5806c085c524021d008b5519-1190-625/salesforce-will-likely-end-its-5-billion-buying-spree-this-year-but-its-rivals-wont.jpg

Salesforce famously went on a record shopping spree last year, spending roughly $5 billion on acquisitions.

Add that to its failed bid for Microsoft-LinkedIn's $26 billion deal, and its surprise interest in buying $12 billion Twitter, and Salesforce truly had one of the most remarkable binge-buying years in history.

Salesforce - Management - Brakes - Spending - Year

But it sounds like Salesforce management is finally planning to put the brakes on its spending this year, according to a note published by UBS's Brent Thill on Tuesday.

"M&A is still important, though any active, ongoing evaluations are focused on smaller tuck-ins for interesting tech (e.g., AI) or talented teams," Thill wrote about Salesforce's thinking after meeting with the company's leadership team. "Management stated it needs to digest the string of recent M&A, which we agree with."

Salesforce - Stock - Part - Investor - Concerns

Thill noted this is important because Salesforce stock has underperformed in 2016 in large part due to investor concerns around Salesforce going after another "mega-sized" acquisition. That would not only hurt Salesforce's cash position, but also signal it's having difficulty finding organic growth from existing products.

Still, Salesforce is likely going to continue to make smaller deals aimed at boosting its artificial intelligence capabilities, as Thill noted. The company's been making a strong push towards adding more AI features to its core products, and has recently hired hundreds of data scientists. Just last month, Salesforce made another acquisition in this space, when it bought a startup called Twin Prime.

Salesforce - Record - Buying - Pace - Year

Salesforce's record buying pace last year coincided with one of the most active M&A years in the software space.

As seen in the chart above, made by Evercore's Kirk Materne, the total enterprise value of the deals in 2016 was significantly higher than any of the previous four years. UBS's Thill also notes there were 58 deals worth more than $100 million last year, up 45% year-over-year from 2015.

And...
(Excerpt) Read more at: Business Insider
Wake Up To Breaking News!
Sign In or Register to comment.

Welcome to Long Room!

Give Us 5 Minutes, We'll Give You The World!

LongRoom Culture
Turkeys Endlessly Circling a Tree! Here we go 'round the mulberry tree... These turkeys are evenly spaced following each other...
Inverted Aquarium Set Into Pond, The Fish Love it! This is the greatest thing for both people who want to look at fish in a...
Dog Makes Snow Angel With Owner! This dog sees its owner making a snow angel and gets all excited about trying it, too!  
Amazing Pool Shot That Spans Ten Tables. This video recorded at AllStars Sports Bar, Bristol, UK, is an amazing feat that...
Huge Alligator Walks Across Visitor's Path In Nature Preserve! This massive alligator was taped walking across the path of...
The Ghost of Eva Gray Seen By Paranormal Investigators In Theater Where She Died At 33 of a Heart Attack In Early 1900's!
Avalanche Safety Backpack Saves Snowboarder's Life When He Gets Caught in Avalanche! The language is understandably a bit rough...
Little Boy and His Dog Wake Up, Come Downstairs and Have Breakfast Together! This adorable video shows a little boy and his dog...
Samsung India's Touching Ad Has Been Viewed Over 37 Million Times And Has People Talking! This ad for Samsung India needs to be...
Newton's Cradle With Changing Colored LED Lights! This device which demonstrates Newton's law of conservation of momentum and...
The Quick Brown Fox Kinda Jumps Over The Lazy Dog! The cute fox definitely looks like it has jumped over this lazy dog before.
Who Needs A Ski Slope, When Any Ol' Hill Will Do? Great snow boarding course down a city street!  This makes for a great trip...
Fish Release To Restock Lake! Geronimo!!  This is definitely a great way to introduce fish to their new home!  They get a...
Freezing A Soap Bubble In REALLY Cold Weather! The patterns forming on this bubble are magical!  It creates an image similar to...
Sometimes When The Winter Starts To Get Boring, You Just Have To Come Up With Something New This guy cut a circle in the ice...
Frozen Soap Bubble Explodes!  With all the cold weather around the country, you can probably try this at home! The soap bubble...
Falcon's Eye View! Exciting footage of a falcon's perspective flying next to a cliff.  I'm wondering how the person got the...
Is It Considered Stealing If You're This Cute? This squirrel knows just where to go to get its favorite candy!    It looks like...
Roll Over, Orca! This charming video shows an orca rolling over in the water in response to a command from this person.
Will The Real Cat Please Come Down? Just glancing at this picture isn't enough to distinguish the real cat from amongst the...
You Don't See This Everyday! This roll of cable gets to choose it's path down the highway.  On the wrong side and against...
Hold Still, Will You??!! Trying to get a picture of the elusive Tree Hugger!  This critter remains just out of view of the...
Awesome Miniature Train! This may be Train Mountain in Chiloquin, Oregon.  Regardless, it is an epic train and an amazing piece...
Big Clingy Kitty Hug! This kitty is not letting go once it has its owner's arm wrapped in a big kitty hug!  
This Runaway Lorry Could Have Ended In A Disaster If It Hadn't Been For The Quick Thinking of This Hero!
Ahhhh!!!! Deadly Black Snake Emerges From Under Hood of Car! Driver Pulls Over Terrified! This is a moment when you absolutely...
Comedien Tal Solomon Records His Adorable Dog Snoring, Then Confronts Him With The Evidence! This Cavalier King Charles Spaniel...
What Is Going On Here? So which end is up in this room?  You can get a clue from the stairs and the view outside the window, or...
Helicopter Landing on a Ship in a Storm! Watching what a helicopter pilot is dealing with on landing on this moving ship makes...