back to article Changes afoot at Salesforce after activist investor Elliott takes a decisive slice

Activist investor Elliott Management has taken a multi-billion dollar stake in Salesforce, which has disappointed markets with its recent growth, in a move that could signal further cost-cutting or divisional selloffs at the CRM giant. In a statement, Jesse Cohn, managing partner at Elliott, said Salesforce was one of the pre- …

  1. Pascal Monett Silver badge

    "improve operating margins"

    Operations. Those things that are done by people. People who cost a salary - generally more the better they are, or so goes the theory.

    So improving operating margins by firing people means that you'll have less people to do the same job - or more. That's a situation that generally sours the workplace and drives people away, thus improving operating margins even more - except that you get to the point where you don't have enough people to ensure operations (eh, Musk ?).

    1. Steve Kerr

      Re: "improve operating margins"

      or IBM!

    2. Anonymous Coward
      Anonymous Coward

      Re: "improve operating margins"

      All true enough; while there are nearly always inefficiencies, and people who don't perform as well for whatever reason, that's basically a factor at all companies.

      I.e. no company is entirely composed of so-called unicorns. If you think your company is, you're either very very small with only a handful of employees, or you're just fooling yourself. Maybe both.

      So no, this line from "activist" (read: "predatory") investment outfits like Elliot about improving operational margins and efficiency etc. is just smokescreen handwaving at most.

      Their play book is to get enough control over the target company so they can force short-term actions like layoffs and cost-cuts and sell-offs to temporarily juice the share price, then cash out and bail, declaring success on the way out the door. Often leaving behind a damaged husk which may never recover from the consulting "help".

      They aren't investors. They're locusts.

    3. SundogUK Silver badge

      Re: "improve operating margins"

      Efficiency is a thing. And it can be improved.

      1. Anonymous Coward
        Anonymous Coward

        Re: "improve operating margins"

        It can.

        Be clear, however: that's not what the likes of Eliot Management are really after. They're not in it for long-term, where efficiency improvements can pay off; they're short-term slash & burn pump & dump types. Profit is their only goal, sooner the better.

        1. Claptrap314 Silver badge
          Unhappy

          Re: "improve operating margins"

          This is the unfortunate nature of our quarterly-report-driven stock market. I don't claim to even have a good idea for structural reform. I certainly think that no-vote shares (like Alphabet and others) are a good step in that direction, but that structure can only be effective for at most a handful of decades before the founders age out.

  2. Slipoch

    What could it hurt?

    1. SAP doesn't work for any client I have had, from big multinationals to smaller local state based organisations it does not do what it promised the client it would. The 1 time I have heard of it working was when it was used for what it was designed for, on production lines.

    2. SAP doesn't really employ technical staff (at least not ones to help clients), they are all sales droids. One of them tried to convince me that the best way to submit data was via a direct js form on a public site with no data validation or verification. Another told staff at another business that a particular function wouldn't be possible in their sql database which I then did in 4 very simple lines.

    3. There is a reason SAP target employees & CEOs above the level of technical staff who will not be using or implementing their product, give them 'training' that happens to be in luxury resorts etc.

    SAP claimed the Victorian Tafe system was a success story, it took 10 years and never managed to take a single enrolement.

    SAP claimed the QLD health system was a success story, but their system deleted all the records of children at risk, resulting in at least one child's death.

    This guy might actually force them to build or modify a product that works as advertised.

    Why? Citrix was shit for VM networking, their product did NOT work well. It had numerous issues with SQL server and remoting in on limited connections and would often fail in my experience. The VM itself was incredibly touchy and had issues running legit software that worked fine on windows xp -> win 8. Dumping that area given they had 10 years to make it work was a case of cutting your losses.

    Yeah this group is predatory, but given SAPs history, good riddance, the less companies out there killing off small business because it 'might' compete with them, the better.

  3. Mayday
    Stop

    Activist

    What on earth makes these hack-and-slashers "Activists"?

    I dont recall ever seeing a positive outcome from Elliot coming around (as mentioned in the article).

    1. Ace2 Silver badge

      Re: Activist

      We need to go back to “corporate raider” - much more accurate

      1. Mayday
        Megaphone

        Re: Activist

        “Corporate raider”

        I actually think “cunce” is most appropriate.

    2. Anonymous Coward
      Anonymous Coward

      Re: Activist

      Those who can do, those who can’t invest.

      1. Anonymous Coward
        Anonymous Coward

        Re: Activist

        > Those who can do, those who can’t invest.

        And those who can't do either, anonymously comment on websites. :)

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like