Initially reported by Bloomberg, Salesforce.com Inc (CRM - Analyst Report), a technology company known for their on-demand CRM (customer relationship management) applications, is reportedly working with financial advisors to assist in dealing with acquisition offers after a potential suitor approached them.

Advisors could help Salesforce.com discourage suitors or facilitate a sale to one of them, Bloomberg reported, citing a person with knowledge of the matter. The report did not name the possible acquirer.

If Salesforce were to be acquired, it would be the largest takeover ever of a software company, triggering rumors that the acquirer could be Oracle Corp (ORCL - Analyst Report), Microsoft Corp (MSFT - Analyst Report) or SAP (SAP - Analyst Report).

Of the three tech giants listed above, Oracle seems the most likely choice.

It is known that Larry Ellison, Oracle’s founder, was an original investor of Salesforce, and that Salesforce CEO Marc Benioff began his career at Oracle. The history between the two companies, albeit a shaky one at times, could give Oracle the leg up it needs.

But beyond the history, the marriage of Oracle and Salesforce could create a cloud computing behemoth that would be a nearly unstoppable force in the technology industry. After all, Oracle is quickly making a name for itself in the cloud computing space. Its cloud business, a coveted venture for most tech companies, is now half the size of Salesforce and is growing at an incredible pace.

Oracle and the Cloud 

Oracle has really made the cloud a focus of their business and it isn’t hard to understand why as the segment remains the main growth driver for ORCL earnings. For their most recent earnings report, the cloud segments were really the only ones that saw meaningful growth as the cloud ‘software-as-a-service/ platform-as-a-service division grew 34% (year-over-year in constant currency) while the cloud infrastructure-as-a-service division saw growth of 32% as well.

The company also recently released a 10-point ‘Cloud Plan’ that looks to make Oracle #1 in the cloud so clearly the company is serious about its commitment here. The platform notes that Oracle is finally starting to see benefits from its investments in the space over the past decade, and that with great security, low pricing, and a diverse offering, customers are flocking to Oracle in droves.

Where Does CRM Fit In?

Salesforce helps to broaden the Oracle offering and this fits in nicely with ORCL’s 10 point plan. Two of the points in particular seem to apply to Salesforce including #2 which states that ‘customers are sick and tired of the cost and time involved in endless integration’ as well as #5 which is ‘complete SaaS suites will win—because application suites always win’.

By adding the giant that is Salesforce to the mix, it will drastically reduce the integration that is required for customers (eventually), while it will mark a vast improvement in Oracle’s offering to customers as well, rounding out the completeness of the company’s current SaaS suite.

Bottom Line

Cloud computing has always been about scale, but before it was limited to companies expanding their infrastructure in order to reduce prices and expand capacity. Now, it appears as though cloud computing is entering a new phase where the scale focuses on product offerings and those that have the widest range will win. A purchase of CRM by Oracle would do just that and it will go a long way in terms of helping the company achieve its medium term goals and become the undisputed king in the cloud computing world.

No matter who ends up being the buyer, the possibility of a merger sent shares of Salesforce higher by about 11.6% in Wednesday trading. This resulted in CRM rising $7.76 on the day, ending at $74.65/share.

According to Bloomberg, Salesforce.com now has a market value of approx. $46 billion, so the company will not come cheap no matter who ends up trying to buy CRM. But, clearly it would make sense for Oracle to take a run at the company as this acquisition would help to make the firm a true leader in the emerging cloud computing battle for years to come.