How Will The Quip Acquisition Impact Salesforce Going Forward?
Salesforce (NYSE:CRM) continued its acquisition spree by announcing its plans to acquire Quip, a cloud-based office productivity startup, for $582 million. The news comes two months after Salesforce expanded into the e-commerce domain, acquiring Demandware for $2.8 billion, and at a time when many software behemoths are strengthening their offerings – as evidenced by Microsoft‘s (NASDAQ:MSFT) recently announced agreement to acquire LinkedIn (NASDAQ:LNKD) and Oracle‘s (NYSE:ORCL) agreement to buy NetSuite.
Quip was started by ex-Facebook and Google employees in 2012 and launched its services in 2013, and Salesforce invested in the company during its funding stage. Quip specializes in cloud-based collaboration, allowing users to collaborate on documents and spreadsheets on mobile and desktop platforms. Currently the company counts Facebook, Electronic Arts, New Relic, Instacart, Al Jazeera, Product Hunt, and Pinterest as its customers.
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What Does Salesforce Gain By Acquiring Quip?
Salesforce’s recent acquisitions show its intent to diversify its offerings to complement its primary CRM tool. While the acquisitions of Demandware and Metamind enabled the company to expand into the e-commerce and deep learning spaces, respectively, the Quip deal is aimed at improving the company’s data processing and collaboration capabilities. Quip will also reduce the company’s dependency on third-party software such as Microsoft Office and Google Docs. Additionally, it will enable Salesforce to bolster its product suite by offering bundled packages for CRM tools.
The Way Ahead
Per Gartner, Salesforce currently has a market share of nearly 20% in the CRM market, followed by SAP (10.2%), Oracle (7.8%) and Microsoft (4.3%). With the acquisition of LinkedIn, for which Salesforce also submitted a bid, Microsoft appears intent on aggressively pursuing additional CRM market share. Meanwhile, with the Quip acquisition, Salesforce looks set to challenge Microsoft in the cloud-based word processing and collaboration domain, and subsequently reduce its dependence on one of its major rivals.