Salesforce is a startup dream-maker: The customer relationship juggernaut loves to snap up smaller companies it sees as beneficial to its growth. And for its targets, being acquired can mean an exit from the uncertain startup phase and, in some cases, a windfall.
In the past year or so, Salesforce (NYSE: CRM) has reportedly spent more than $4 billion acquiring smaller companies, some from Chicago.
Salesforce is huge. It’s the third-largest computer software company on the Fortune 500, it has more than 20,000 employees around the world and its fiscal year 2016 revenue topped $6.6 billion. On Friday, rumors swelled that it was circling Twitter.
“When we came into this year, we didn’t really have (mergers and acquisitions) on our forecast and the reason why is, because when we look at doing M&A we look for really strategic, great companies that are one of a kind, and also that we are going to get a great price,” Salesforce CEO and Chairman Marc Benioff said on the company’s most recent earnings call.
He said it was the opportunity to buy professional networking site LinkedIn — which it lost to Microsoft’s $26 billion bid — that sparked the latest wave of acquisitions.
Acquiring technology and talent helps Salesforce improve and expand its tools, the company wrote in its fiscal year 2016 annual report.
Here are the Chicago companies that are now part of Salesforce:
Gravitytank
Salesforce said in September 2016 it would acquire innovation consultancy Gravitytank, which is headquartered in Chicago and has offices in San Francisco, for an undisclosed amount. Gravitytank employs more than 70 consultants who specialize in research, strategy and design. Its clients include the Bill and Melinda Gates Foundation, OfficeMax and Skype.
The company’s engineering talent could have been a factor in the acquisition.
“The acquisition is expected to help Salesforce design and develop better software solutions to help customers across various industries to connect with partners, clients and employees in newer and more innovative ways,” according to an analyst blog at Zacks Equity Research.
Steelbrick
While Steelbrick isn’t based in Chicago — its headquarters are in San Mateo, Calif. — the company’s large workforce presence in Highland Park, Ill., and the local connections of its CEO, Godard Abel ?, earned it a spot on this list. Steelbrick builds Configure, Price, Quote (CPQ) apps that help companies determine the prices of goods, as well as subscription billing apps on the Salesforce platform.
Salesforce paid $360 million for the company in a deal that closed in February 2016.
“The Company acquired SteelBrick for its employees and product offerings,” Salesforce wrote in the 2016 annual report.
ÄKTA
Salesforce acquired this digital design firm, whose clients included Starbucks and ComEd, for an undisclosed sum after a deal announced in September 2015.
“As part of Salesforce, we will be able to help bring customers’ vision to life with a truly novel combination of strategic leadership, design thinking, brand strategy, industry-leading engineering and software,” founder and CEO John Roa ?
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wrote at the time.The firm is now known as Salesforce Experience Design.
Model Metrics
Salesforce gobbled up this River North-based cloud computing company for an undisclosed sum. Model Metrics helped clients including Boeing and Abbott Laboratories migrate their business applications online, earning it $25 million in annual consulting revenues in 2010, the company told the Tribune.
“The addition of Model Metrics’ mobile and social expertise will accelerate salesforce.com’s ability to lead the shift to the social enterprise and empower partners to develop their social enterprise practice,” then-COO George Hu said in November 2011.
Instranet
Instranet, which made knowledge management software for call centers, was Salesforce’s first local acquisition. Salesforce bought it for about $31.5 million, according to a press release in August 2008. Instranet was headquartered in Chicago with most of its operations in Paris.
“We’re excited to add this unmatched technology to our SaaS applications and Force.com platform,” Benioff said in the press release. “Not only will it make our service and support offering stronger for our customers and further their success, but it will help catapult our growth in the customer service and support space.”
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