What Did Oracle Beat Microsoft To? Nomura Analyst Divulges His Suspicions

Ever since the news that salesforce.com, inc. CRM is looking for an acquirer broke out, the Street seems to be divided on who would make the first move to acquire the company. Opinions seem split between Microsoft Corporation MSFT and Oracle Corporation ORCL.

Rick Sherlund from Nomura Securities was on CNBC Wednesday to explain why he thinks Oracle was the first company that made the move for Salesforce, elbowing out Microsoft.

The Big Deal

"This is really unprecedented for the tech industry to see something this big," Sherlund said.

"It'll be about $65 billion, probably at 8 times revenue, which is the middle of the range for acquisitions in this cloud space."

Related Link: Piper Jaffray: Microsoft-Salesforce Combo Could "Reshape" Cloud, Enterprise Landscape

Oracle: The Protestor

Sherlund thinks that Microsoft is "far less likely" to be an acquirer for Salesforce, because Salesforce "is a much better strategic fit for Oracle."

He explained, "They are in that business; they want to own that market. Marc Benioff used to work for Larry Ellison."

Sherlund also thinks that "Oracle has excess sales capacity to absorb this. And Oracle kind of protests too much. So, one suspects that Oracle probably was behind this originally."

The Board Must Know

Sherlund revealed that last week he was at Microsoft's Developers Conference in San Francisco. Following the news of Salesforce's search for acquirers, he brought up the conversation with a few Microsoft board members whose responses appeared to be complete surprise.

"I wouldn't think you'd do a $65 billion acquisition without informing the board. So, I think Microsoft was not the original company that might have approached Salesforce. My suspicion is there's so much smoke here, maybe there's fire underneath it.

"It could just be bankers trying to drum up interest and make it look like there's a competitive process. They do that sort of thing," Sherlund concluded.