Mergers and acquisitions (M&A) are complex, high-stakes events that often disrupt technology ecosystems. Among the most challenging systems to reconcile post-transaction is Salesforce. As one of the most entrenched SaaS platforms in enterprise environments, Salesforce frequently spans multiple business units, geographic regions, and functional areas. When two Salesforce-using organizations come together, their combined licensing footprint often creates immediate complications involving duplication, underutilization, contract conflicts, and excess cost.
Understanding the licensing implications of M&A is critical for CIOs, IT asset managers, procurement professionals, and legal teams. Poorly managed Salesforce consolidation can lead to substantial overspend, compliance gaps, and missed synergies. Properly managed, it becomes an opportunity to optimize entitlements, renegotiate contracts, and enhance strategic vendor alignment.
According to Deloitte's 2024 M&A Trends Report, 76% of organizations identify IT integration as a top-three challenge during post-merger integration (PMI). Salesforce, as a mission-critical application in customer engagement and revenue operations, is often at the center of this struggle.
Compounding the challenge is the evolving Salesforce licensing model. With bundled solutions (e.g., Customer 360), usage-based add-ons (like Flex Credits), and product sprawl from acquisitions such as Slack, MuleSoft, and Tableau, merging two Salesforce environments is not simply a matter of combining data. It involves careful attention to licensing terms, user provisioning models, and integration rights across different orgs (instances).
Moreover, most Salesforce contracts are multi-year, non-cancellable agreements with fixed user or spend minimums. This can leave the post-merger entity with redundant or unusable licenses and no contractual path to reduce them.
It is common for both merging organizations to have active Salesforce contracts, often with different durations, product mixes, and commercial terms. One entity may be on a discounted SELA while the other operates on transactional licensing with annual escalators. Conflicts can arise regarding renewal timing, license metrics (per-user vs. per-login), and bundled vs. a la carte services.
Additionally, restrictions around license transfers or reassignment may limit the organization’s ability to consolidate users into a single org or redistribute entitlements to where they’re needed most.
Orphaned licenses are entitlements that remain unused post-transaction due to overlapping functions, redundant staff, or lack of integration planning. These often go unnoticed until renewal or audit cycles, resulting in wasted spend and potential compliance exposure.
Worse, lack of clarity around who owns which licenses and who has authority to manage them can create governance gaps. Salesforce contracts may restrict how licenses are used across legal entities, geographic regions, or subsidiaries, and violating these terms could trigger breach.
Without a clear inventory and usage dashboard, organizations struggle to identify redundant licenses and negotiate from a position of strength. Salesforce often treats each contract as a separate entity, which makes it difficult to align pricing, volume discounts, and product usage across the combined company.
Multiple contracts may also mean multiple customer success managers (CSMs), fragmented support, and inconsistent deployment strategies.
Even when consolidation is the goal, integrating Salesforce orgs can be technically and contractually difficult. Licensing terms may restrict data movement between orgs, especially if the data pertains to separate legal entities. Migrating users, custom code, or third-party integrations may require re-licensing or trigger contract changes.
Organizations that pursue org consolidation too quickly may also lose valuable customization or incur reimplementation costs that outweigh license savings.
Addressing Salesforce licensing challenges in an M&A scenario requires a structured, cross-functional approach. The following steps help reduce risk and unlock value:
Immediately post-close, organizations should inventory all existing Salesforce contracts, user entitlements, and product SKUs. This includes:
Understanding what is owned, what is used, and what is wasted enables rational decision-making. This step is foundational to any consolidation strategy.
Salesforce account teams often maintain separate relationships with each pre-merger entity. Post-merger, it's critical to establish a unified engagement strategy. Designate a single point of contact and communicate the intent to consolidate contracts, unify orgs, or optimize spend. Early engagement can pave the way for:
Many Salesforce contracts restrict license usage to specific named entities. Review and renegotiate these clauses to allow flexibility across the new organizational structure. Where necessary, amend contracts to reflect updated tax structures, operational hierarchies, and shared services models.
Also, confirm that shared data environments (e.g., data lakes or integrated analytics platforms) do not violate data residency or data-sharing restrictions embedded in existing contracts.
Salesforce org consolidation can drive cost and operational efficiencies, but it must be done with care. Perform a readiness assessment that evaluates:
If consolidation is not viable, consider a hub-and-spoke model with shared middleware or data integration layers. This enables some unification without full reimplementation.
Use the M&A event as a strategic inflection point to revisit pricing. With increased user volumes and broader usage, the merged organization may qualify for better pricing tiers, additional discounts, or more flexible commercial terms.
Create a detailed renewal roadmap that accounts for contract end dates, true-up timelines, and Salesforce fiscal quarters (which influence their pricing leverage).
When managed proactively, M&A events offer a unique opportunity to realign Salesforce licensing with business value. Key benefits include:
M&A deals don’t just combine balance sheets—they combine technology estates, licensing obligations, and vendor relationships. For Salesforce, this means reconciling not only how the platform is used, but also how it is bought, governed, and optimized.
IT, procurement, and legal teams must work in lockstep to assess existing licenses, engage Salesforce with a unified strategy, and pursue consolidation and repricing opportunities where they make sense. Done right, post-merger Salesforce optimization becomes a strategic advantage, not a costly burden.
2Data is an independent software licensing advisory specializing in Microsoft, Oracle, SAP, Salesforce and IBM optimization. We help companies reduce contract costs, manage risk, and simplify their software licensing.
