Microsoft evaluates possible bid for Salesforce though companies are not in talks
Context & Ripple Effects
Bloomberg's report lands mid-negotiation arc: within weeks, sources told CNBC that Microsoft had offered $55B while Marc Benioff held out for $70B, with talks ending in early May — so today's 'evaluating, not in talks' framing sits right at the point where the two sides' price expectations diverged.
The story also reframes Salesforce as an aggressive consolidator rather than just a target: Benioff later confirmed his company was a rival suitor for LinkedIn when LinkedIn approached Microsoft, and by September 2016 Salesforce was working with Bank of America on a potential Twitter bid alongside Disney. One company, simultaneously buyer and seller.
First-order effects
- Salesforce's board and investors now have a concrete reference point for valuation: Microsoft's reported $55B offer against Benioff's $70B ask defines the negotiating gap any future approach must bridge.
- Microsoft gains optionality without commitment — an evaluated-but-unstruck bid lets it signal ambition in enterprise software while keeping cash reserved for targets where talks actually happen.
Second-order effects
- Microsoft's willingness to lose Salesforce over roughly a $15B gap foreshadows how it negotiates elsewhere: when LinkedIn came up, another bidder likely Salesforce offered $200/share in cash and stock, but Microsoft's higher all-cash structure prevailed — price discipline paired with payment flexibility.
- Rival large-cap software CEOs now have to plan around a market where their company could be either Microsoft's next target or its bidding competitor, complicating their own acquisition strategies.
Third-order effects
- If the pattern holds — Salesforce circling Twitter and LinkedIn while being circled by Microsoft — enterprise software consolidates into a handful of platform-scale buyers, with mid-tier SaaS firms forced to pick a patron or build comparable scale.
- A recurring dynamic emerges from the corpus: Microsoft's later pursuit of Activision Blizzard, after the company shopped itself to other buyers including Meta, shows distressed-or-ambitious sellers increasingly treat Microsoft as the default deep-pocketed counterparty, entrenching its position as the industry's clearinghouse for transformative deals.
The trend: Large-cap software is entering an era of serial megadeal consolidation, where the same handful of companies alternate between acquirer and target as they race to assemble end-to-end platforms.