Salesforce + Oracle = The Big Cloud Bet, Says FBR Capital
Shares of salesforce.com, inc. (NYSE: CRM) skyrocketed to make an all-time high Wednesday on a report from Bloomberg that revealed the company has roped in financial advisers to find itself a buyer.
While most people on Street consider Oracle Corporation (NYSE: ORCL) to be the best match for Salesforce, Oracle hasn't commented yet on its interest.
Oracle's Big Bet
"We view Oracle front and center for really a number of reasons," Ives said. "One, Oracle is desperate when it goes to the cloud to really make what I view is a game changing acquisition. Salesforce has been the gold standard here.
"This would make a lot of logical sense strategically, financially and especially in terms of where Oracle needs to play on the cloud. They have been late to the game, and with Salesforce, I mean, that would really be them making the big bet on cloud."
He continued, "It's always been talked about – potential Oracle and Salesforce. And even though we could say Microsoft and IBM out there, this is the golden combination and it would be really cheered by the Street and it would really take Oracle into a different sphere in terms of cloud."
Oracle Has The Capacity
On Oracle's financial strength to be able to do a deal of this magnitude, Ives said, "They have capacity – $45 billion in cash, $40 billion in debt.
"But, they generate about $15 billion a year in cash flow. So, they definitely have the capacity to do a deal like this," Ives concluded.
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