Salesforce.com in talks to buy SteelBrick for $600m

Salesforce.com - the innovator in cloud based Customer Relational Management (CRM) - has entered talks to acquire the software company SteelBrick for a rumored $600 million (£402 million), although most of this would be in stock.

SteelBrick would be a good fit for Salesforce.com as its software involves configure-price-quote software (CPQ), which enables salespeople to create proposals for business to business deals. The advantage that SteelBrick’s software brings is that it allows complex proposals – perhaps involving multiple products, discounts and commissions – to be easily calculated and then offered in a single deal.

The obvious value to Salesforce is that SteelBricks CPQ software would assist its customers in accurately setting pricing for their products, while taking into account a huge number of different variables. As products and services become increasingly complex, CPQ solutions become increasingly important and add value to the Salesforce.com product.

The acquisition of SteelBrick seems to make sense for Salesforce.com. Its sales module could do with the added value sales feature as it would benefit all the customer base when dealing in complex B2B deals. And, SteelBrick’s ‘quote-to-cash’ software as it is described, is already designed and built to be a native plug-in to Salesforce.com code.

Furthermore, SteelBrick is one of Salesforce’s vibrant partner networks where collaborating companies provide value added software to the core Salesforce product. This business model has always been a symbiotic partnership, as both parties benefit, one by having a popular ready built platform for their software and the other through value-added features.

However, it is the highly vibrant partner ecosystem that could prove to be the snag, as SteelBrick is not the only supplier of CPQ solutions for Salesforce.com, and this could leave the others (Apttus, CallidusCloud, Cameleon Software, FPX and Selectica) feeling somewhat aggrieved, as many have invested heavily in their relationship with Salesforce.com.

Image source: Shutterstock/Gil C