B-2-Billions: Salesforce buys Slack for $ 27.7 bln
It’s time for remote working and cloud computing: Californian software giant Salesforce buys Slack, a messaging company for business, for 27.7 billion dollars. The agreement is expected to be completed in the second quarter of 2022. Founded in 2013, Slack reported more than 12 million daily users in 2019.
Salesforce in pills
Salesforce was founded in 1999 by Marc Benioff, a former Oracle executive, along with three other co-founders (Parker Harris, Dave Moellenhoff, and Frank Dominguez). Right from the start, the company positioned itself in the “business to business” (B2B) sector, ie in the sale of services for other companies, and Benioff’s main intuition, among the first in this, was to invest in cloud computing technology, that is, on the supply of very efficient and easily accessible services via the internet.
The main product of Salesforce is its proprietary CRM (customer relationship management) service, that is a system thanks to which companies can obtain, collect and manage all their customer data in one place and use it to find new customers, improve sales, create effective marketing campaigns, increase collaboration between company teams, provide after-sales assistance. Everything, we said, is done on the cloud.
Salesforce has been very successful, especially in recent years, when cloud technology has become very important in the corporate world and beyond. The fact of operating in a large but all in all limited sector, however, has prevented it from making the definitive leap in quality and reaching the size of competitors such as Microsoft.
Why Salesforce bought Slack
Although it is a much smaller company, Slack is paradoxically better known than Salesforce. Founded in 2013, it is a cloud-based chat app created to facilitate communication between employees within a company with sophisticated collaboration tools. Its goal, says co-founder and CEO Stewart Butterfield, is to make email obsolete, which is still the main communication tool within companies today.
Leaving out the financial implication of this news, Benioff and Butterfield’s plan is to integrate their two products to provide businesses with a more comprehensive and harder-to-beat service. Slack is also a B2B and cloud-based company, so integration is relatively easy and very promising. Slack is also a well-known name, which could help Salesforce to expand its clientele and make the leap in quality, also thanks to the considerable amount of data it possesses. Benioff had already tried it in 2016 by making an offer for the social network LinkedIn, but he had gone to Microsoft.
Microsoft, the common “enemy”
In the crosshairs of Salesforce are Microsoft and its dominance as a software provider for companies. Almost contemporary of LinkedIn acquisition, in 2016, after trying to buy Slack, Microsoft launched Teams, a product substantially similar to Slack. Teams have threatened Slack market share in the last years, so this deal could be the chance for the 2 companies to merge the forces and take over the big tech giant. The plot is not over yet and we will see how things will change with this new Salesforce-Slack Asset.
The deal represents the biggest bet among the acquisitions made by tech companies to capitalize on the shift to remote work. A positive forecast is coming from Salesforce which does underline a bright future coming from the acquisition, in fact, Marc Benioff (CEO at Salesforce) called Slack a “supercharger” for Salesforce. He said they will expand Slack in the enterprise field especially by combining the companies’ capabilities. He added that currently, 90% of Slack’s enterprise customers are also Salesforce customers. (Source: CNN)