[cykho]

The main driver of Microsoft's net income growth over the last few years has been all enterprise software (Windows Server, SQL Server, Sharepoint). Their CRM (Dynamics) is the #2 player in the market.

Acquiring Salesforce would enable Microsoft to dominate this sector (approach 50% market share potentially). Salesforce has done a great job of fostering an ecosystem of apps that rely on their data platform.

Microsoft can add value to the existing SalesForce product by replacing their cloud infrastructure. While pioneering this concept in the enterprise SalesForce's infrastructure is outdated and aging. Plugging the existing customer base and app ecosystem into Azure (or Microsoft's cloud at large) could be a huge win for both companies.

Net-net this makes a ton of sense in theory, but big mergers destroy value more often than not as they are extremely challenging to execute effectively (it's basically a multi-billion dollar corporate refactoring exercise).

[adventured]

SAP and Oracle are both larger than Microsoft in CRM. SAP is nearly twice the size of Microsoft in that segment.

[frik]

Salesforce.com may feel like Web 1.0 software, but SAP feels like terminal style software. The syntax of ABAP (SAP script language) is somewhat similar to COBOL: http://en.wikipedia.org/wiki/ABAP . Microsoft Dynamics CRM feels like Web 2.0. Oracle bought SiebelCRM and it's seem more modern.

This says nothing about their capabilities, they are all feature rich. And conservatism in ERP and CRM business is valued by enterprise customers.