Updated: April 23, 2024
Salesforce has been keeping a close eye on Informatica this year following reports that they were in the advanced stages of acquiring the data giant. However, almost a week on, the Wall Street Journal reported that talks may have fizzled out after neither company could agree on the terms of the deal.
Or perhaps there was nothing behind the rumors in the first place? Informatica has now officially quashed any talk of a possible acquisition with this recent press release.
“Although Informatica’s policy is not to comment on market rumors or media speculation, the Company announced that it is not currently engaged in any discussions to be acquired.”
Amit Walia – CEO of Informatica
In the same breath, Informatica has announced that Jitesh Ghai, Executive Vice President and Chief Product Officer, will be stepping down “to pursue an executive opportunity at another company”.
“On behalf of the Informatica team, I thank Jitesh for his many contributions. We wish Jitesh all the best in this exciting next step of his career.”
Salesforce’s Acquisition Strategy
Salesforce has become infamous for its acquisition strategy over the years; the vast majority of Salesforce’s flagship products such as Marketing Cloud, Slack, Tableau, and Commerce Cloud have all been acquired in multi-million dollar deals.
In recent years, however, Salesforce has been criticized for overpaying for products like Slack and failing to integrate more products into their platform. Ultimately, this came to a head in early 2023 when activist investors suggested that Salesforce should sell some of their key acquisitions (including Slack and Tableau). Therefore, it wasn’t a total surprise that Salesforce’s stock dropped just over 7% when markets opened on Monday last week (Informatica was also down 6.5%).
Salesforce’s Approach to Data
At this moment in time, Salesforce is taking an all-in approach to their data. They have pivoted their entire business messaging to focus on Data Cloud + Artificial Intelligence, ensuring that customers can both integrate data from many different sources and use AI to drive predictive and generative insights.
Informatica was pegged to sit alongside Salesforce’s existing product MuleSoft, and help integrate systems via ETL (Extract-Transform-Load), support data quality, and manage data lakes. It was also reported that Salesforce was discussing an offer for Informatica that was below its current share price at the time the rumors were released.
Rumors of this deal, alongside the stock damage both companies faced, drew criticism from both market analysts and the Co-Founder of Informatica, who thought that there would be too much overlap with MuleSoft.
Final Thoughts
Salesforce is clearly playing the long game when it comes to AI. Although they must keep the hype-machine energy high, AI is not happening overnight, and you need a lot of systems in place before you can really maximize insights from large language models.
The rumored Informatica deal could have been the missing piece of the puzzle for Salesforce to make their platform central to the AI revolution. But for now, possibly due to the way the market reacted, talks have cooled.
The post Salesforce-Informatica Acquisition Talks Stall: Here’s Why appeared first on Salesforce Ben.