Salesforce merger is a bad idea, says Informatica co-founder
By Jon Swartz
Salesforce's integration of Informatica's technology would be 'a complex, time-consuming project' that could take more than five years, according to Gaurav Dhillon
A rumored pairing of Salesforce Inc. and Informatica Inc. is a bad match, insists one of Informatica's co-founders.
In an interview with MarketWatch on Tuesday evening, Gaurav Dhillon - who co-founded software developer Informatica (INFA) in 1993 and is now chief executive of software company SnapLogic - called the potential deal a "real step backwards" for Salesforce (CRM) and said it would lay a "rocky road ahead for Informatica customers due to the significant overlap in integration products."
"With two disparate platforms, Salesforce now has to navigate merging MuleSoft's technology with Informatica's technology - a complex, time-consuming project that will likely take more than five years to complete," Dhillon said.
Dhillon considers the potential purchase of Informatica an unnecessary overlap with MuleSoft, which Salesforce acquired for $6.5 billion in 2018. Salesforce's motivation to buy Informatica, he said, is a brazen attempt to "bulk up revenue and engineering."
"Salesforce is getting away from its strength," according to Dhillon. "It is a U-turn for its strategy."
Representatives for Salesforce and Informatica both declined to comment on Dhillon's assessment of a merger between the two companies.
Dhillon added that Salesforce's acquisition of Informatica would be "massive validation and an 'I-told-you-so' moment for SnapLogic, a company that was founded on the premise that one unified platform is needed for application and data integration." He noted that Adobe Inc. (ADBE), AstraZeneca (UK:AZN) (AZN) and Sony Group Corp. (SONY) are among SnapLogic's customers.
While some analysts believe a pairing with Informatica will aid Salesforce in its bid to help companies run artificial-intelligence queries on their troves of data, others see serious flaws, which have helped send Salesforce shares down since news emerged of a potential deal.
Read more: Opinion: How Salesforce's potential Informatica deal is an unwelcome flashback to its old ways
"We question if potential revenue synergies can be realized," Guggenheim Securities analyst John DiFucci said in a note to clients last week. "Salesforce has a mixed M&A integration track record. Also, Informatica would lose its 'Switzerland' status, which is important to its customers.
"Lastly, Informatica competes directly with MuleSoft, and potentially Tableau to a lesser extent," DiFucci added, referring to two of Salesforce's other products that it has acquired in recent years.
-Jon Swartz
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
04-17-24 1856ET
Copyright (c) 2024 Dow Jones & Company, Inc.-
Is ServiceNow Stock a Buy After Earnings and Its Investor Day?
-
3 Stocks to Buy and 3 Stocks to Sell After Earnings
-
Markets Brief: Is It Really a Surprising Quarter for Earnings?
-
After Earnings, Is Berkshire Hathaway Stock a Buy, a Sell, or Fairly Valued?
-
For Bond Investors, Delayed Rate Cuts Demand a Different Playbook
-
What’s Happening In the Markets This Week
-
How the Tokyo Stock Exchange Is Pushing for Better Shareholder Returns
-
Magnificent 7 Stocks Earnings Updates: AI Remains the Focus
-
After Earnings, Is Coke Stock a Buy, a Sell, or Fairly Valued?
-
Disney Earnings: Improved Streaming Results Come at the Expense of Continued Linear Weakness
-
Apple: We Expect New Models and New Chip to Spur Return to iPad Growth
-
Palantir Earnings: AI Platform Drives Strong Start to 2024
-
What I Hope My 14-Year-Old Learned at Berkshire Hathaway’s 2024 Annual Meeting
-
After Earnings, Is Amazon Stock a Buy, a Sell, or Fairly Valued?
-
The 10 Best Dividend Stocks
-
3 Stocks With High Dividend Yields That Warren Buffett Likes