Piper Sees Amazon Geting ‘Cozier’ With Salesforce In 2016

Piper Jaffray analyst Alex Zukin highlights that news sources this week reported that Salesforce (CRM) will be building its new Internet of Things offering on Amazon Web Services (AMZN).

This is a “notable shift” as Salesforce typically relies on its own infrastructure when it comes to deploying its software, Zukin tells investors in a research note. He believes the deal could represent “just the tip of the iceberg” of the two companies working together. In fact, Zukin sees 2016 as the year that Amazon makes a push to “get cozier” with Salesforce. The analyst sees three potential outcomes from the two companies working together. In order of least to most likely, the outcomes are Amazon potentially buying Salesforce, Amazon spinning out AWS and combining it with Salesforce, or Amazon signing a strategic sales partnership with Salesforce for AWS.

Zukin believes Salesforce could emerge as the biggest winner as the major tech companies vie for market share in the cloud. He keeps an Overweight rating on the shares with a $95 price target. Salesforce closed yesterday up 12c to $75.91.