Piper Jaffray: Microsoft, Salesforce Combo Could 'Reshape' Cloud, Enterprise Landscape

Bloomberg reported Tuesday that Microsoft Corporation MSFT might be interested in making a bid for salesforce.com, inc. CRM. Analysts at Piper Jaffray said that this combination "would make a lot of sense, in our opinion," noting that it "could also reshape the cloud and enterprise applications landscape."

Piper said that Microsoft could afford a $65 billion price tag, which equates to Salesforce at $100 per share. Salesforce is trading at $73.80 – a 36 percent premium.

Specific to Microsoft, Piper said that the combination also makes strategic sense and fits within Microsoft CEO Nadella's Cloud-First, Mobile-First focus. It would put Microsoft in a good position to reach its 2018 cloud revenue target of $20 billion, as well. Perhaps more importantly, the acquisition would put Microsoft "at the forefront of a platform shift for the first time in a generation."

Related Link: Brean Comments On Microsoft-Salesforce Rumor

For the industry, Piper Jaffray noted that the combo could "open up some surprising possibilities that have the potential to reshape the software industry." Included in those, the fact that Microsoft could be the No. 1 cloud platform and largest tech company in San Francisco.

The analysts held their Overweight rating and $53 price target on Microsoft. Overall, Piper said, "we continue to like the direction that Microsoft is headed," arguing that the company "seems to have more vision now than in the past 15 years."

Microsoft was lower by 1.7 percent to $46.81. The most recent move lower follows a failure of the stock to overtake its 52-week high at $50.02 late in April. Salesforce is more than 24 percent higher this year following these takeover rumors.