- After following markets lower earlier today, Workday (WDAY +1.1%) has turned positive in the wake of a column from The Information's Steve Nellis arguing Microsoft (NASDAQ:MSFT) should buy the cloud HCM/financials software leader.
- Nellis: "Only Salesforce (NYSE:CRM) and Workday have enough revenue momentum to help Microsoft become a major seller of software for tracking customers, employee records and financials. But Workday is the better choice for several reasons, including the fact that Salesforce’s products feel dated."
- CNBC reported in May Microsoft held buyout talks with Salesforce, the sole enterprise cloud software pure-play larger than Workday, while adding the companies "remained far apart on a price."
- With a current market cap of $14.8B - would the company be willing to sell at $19B-$20B? - Workday would be a much less costly acquisition for Microsoft than Salesforce ($45.3B market cap). Both the company's forward sales multiples and expected growth rates are notably higher than Salesforce's.