Salesforce and Google Announce Cloud Partnership

Cloud-software giant Salesforce (NYSE:CRM) and Alphabet (NASDAQ:GOOGL), Google’s parent company started the week off on a high note when the companies jointly announced the formation of a “new strategic partnership” on Monday (November 6).

The partnership comes after months of speculation, Bloomberg reports, stating that earlier this year the two companies were “headed for an even bigger combination.” The article continued, stating that analysts and investors previously hypothesized that Salesforce “could be a takeover target” for tech giants, including Google.
“We have a lot of mutual customers,” Ryan Aytay, a business-development executive at Salesforce, was quoted saying. “There’s a lot of demand for us to work more closely together.”

Under the terms of the agreement Google Cloud will become Salesforce’s “preferred public cloud provider”–which, in a way, puts some strain on Salesforce’s relationship with Amazon Web Services, which has been Salesforce’s “preferred public cloud infrastructure” provider since May 2016.
“Salesforce plans to use Google Cloud as a preferred public cloud provider to support the company’s rapidly growing global customer base,” the release said.
On that note, Salesforce said at its Dreamforce event on Monday that Amazon Web Services will continue remaining its preferred public cloud provider, while the Google Cloud will be used as part of Salesforce’s international infrastructure expansion.
The partnership will integrate Salesforce’s CRM platform with Google’s G Suite to enhance productivity and “team collaboration services,” between platforms such as Salesforce Lightning and Quip, to Gmail, Hangouts Meet, Google Calendar, Drive, Docs, and Sheets. Salesforce customers that are new to G Suite will be offered a company-wide promotion for G Suite licenses at no extra charge for one year, provided by Google.
“Our partnership with Google represents the best of both worlds for our customers,” Marc Benioff, CEO of Salesforce said in the release. “This partnership will help make our customers smarter and more productive.”
The deal will also combine Salesforce with Google Analytics to connect sales, marketing and advertising across Salesforce Sales Cloud, Salesforce Marketing Cloud, and Google Analytics 360 “for the first time.”
Following the announcement, shares of Salesforce have dipped 0.26 percent to $102.42 at Monday’s close, although after hours trading bumped its stock price up 2.37 percent to $104.85. The story is similar for Google, whose share price dipped 0.7 percent to close at $1,042.68, although after hours trading bumped it up 0.08 percent to $1,043.50.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.