RBC predicts Google could acquire Salesforce to leapfrog Microsoft in the cloud market and spin out Google Cloud Platform into a dedicated company.

RBC Capital Markets said Google could buy Salesforce, with a projected purchase price of as high as $250 billion — a premium of almost 70% to its market cap. RBC said Google could spin out its cloud business into a standalone company valued at as much as $226 billion.Acquiring Salesforce would allow Google to instantly jump to the No. 2 spot in the cloud market behind Amazon, displacing Microsoft, RBC projected.  This isn't the first time analysts have predicted major cloud acquisitions for Google. Just last week, Wedbush Securities analyst Dan Ives told Business Insider he expected Kurian to lead Google to major acquisitions and identified four potential targets.

Analysts at RBC Capital Markets made some bold predictions for how Google could catch up to Amazon Web Services and Microsoft in the cloud-computing businesses. RBC's projections would require Google to spend big. The equity-research firm in its 2020 software outlook report said Google could acquire Salesforce to leapfrog Microsoft in the cloud market in a deal that it projects to be valued at as much as $250 billion. In such a case, RBC expects Google would have to leverage debt to make it work.  RBC also predicted in the report that Google could acquire the software company Nutanix to bolster its efforts in hybrid cloud and pay as much as $10.1 billion, well over the company's current market cap of about $6.3 billion.

The predictions come just as Goldman Sachs reported a slight decline in Google Cloud usage, according to a survey of 100 technology executives from Global 2000 companies. Google is by far the No. 3 cloud player. Gartner most recently estimated AWS had a 47.8% market share in 2018, compared with Microsoft's 15.5% and Google's 4%. But RBC analysts see potential for the business after Google earlier this year hired Thomas Kurian as the new CEO of Google Cloud. Bottom line is that Google Cloud Platform is a clear No. 3 player in the public cloud, significantly trailing both AWS and Azure by annualized revenue market share, the note said. 

Google has been making an aggressive push both with respect to talent acquisition, technology partnerships and M&A to sharpen its strategic enterprise value proposition. Google could acquire Salesforce and reach its goal to become the No. 2 cloud player by 2023, RBC said. According to a source who spoke with Business Insider in August, Kurian told employees Google Cloud has a five-year goal to become at least the No. 2 cloud. We don't see a viable organic way to get there, the RBC note said. However, acquiring Salesforce would allow Google to instantly jumpto the No. 2 spot behind Amazon, displacing Microsoft, RBC said.

Observers have speculated since he took the job that Kurian could be looking to make megadeals to help Google leapfrog closer to cloud supremacy. Wedbush Securities analyst Dan Ives expected Kurian to lead Google to major acquisitions, including potential deals to buy publicly traded entities, like the cloud-based finance and human-resource firm Workday (valued at $37 billion), the cybersecurity provider Palo Alto Networks ($23 billion), the cloud-software company ServiceNow ($53 billion), and the data-analytics company Splunk ($23 billion). Spinning out Google Cloud Platform RBC also predicted Google would spin out its cloud business into what would be the third most valuable enterprise-technology company behind Microsoft and Amazon.