Salesforce is buying Slack for close to $28 billion

Share

Stating that this is the "most strategic combination" in software history, Slack cofounder and CEO Stewart Butterfield said "Salesforce started the cloud revolution, and two decades later, we are still tapping into all the possibilities it offers to transform the way we work".

Salesforce shares slid more than four percent in after-market trade on the acquisition news, while Slack shares slipped a fraction of a percent.

Still, despite its growth, the company has struggled during the 18 months since going public and hasn't been profitable for three quarters.

Salesforce.com was one of the first Saas startups, and has emerged as a leader in cloud computing.

But software as a service has become an industry standard that has turned into a gold mine for longtime software makers.

Both Microsoft Teams and Slack have made efforts to capitalise on the spike in remote working due to the COVID-19 pandemic.

When news of Salesforce apparent interest in buying Microsoft Teams rival Slack broke last week, I described as a no-brainer.

According to Angela Ashenden, principal analyst, workplace transformation at CCS Insight, the acquisition of Slack by Salesforce has been more of a question of when, than if. Dan Ives, managing director of equity research at Wedbush Securities, said in a memo that keeping pace with Microsoft was the "core reason for this deal".

DOJ Not Done Investigating Election Fraud, Spokesperson Says
Durham's review subsequently developed into a criminal investigation, which remains ongoing", Barr wrote in the order. Before the election, Barr had repeatedly said that mail-in voting was vulnerable to substantial fraud.

Yes, that's almost the same as Microsoft paid for LinkedIn ($26.2bn) in 2016.

Marc Benioff of Salesforce. "I've always had this $50 billion dream for Salesforce, so let's see us go there", the billionaire said. "It's a central nervous system for so many companies". And this marks Salesforce's largest acquisition to date - and one that positions it to compete directly against Microsoft with a growing suite of business software tools.

Late last week, Slack's stock evaluation rose more than 25% on rumors of a pending deal with Salesforce.

Slack has become a major part of our work lives for many of us in 2020.

In a move that defies his comments from Salesforce's Q2 2021 earnings call, the company just announced it is acquiring collaboration giant Slack in a $27.7 billion deal. Slack will become an operating unit of Salesforce and will continue to be led by its current CEO, Stewart Butterfield. Flickr got lost in the shuffle at Yahoo amid years of turmoil before it was finally sold again in 2018 to SmugMug. In October 2019 the two companies announced the Salesforce for Slack application, which allows sales and services professionals to more easily access and share information from Salesforce applications within Slack.

What's more, he noted that 90% of Slack customers are already Salesforce customers.

Despite the substantial surge in market value following a dip, and the launch of Slack Connect earlier in the year, Slack has been left behind by Microsoft and Facebook, both of which have established their own business chat and productivity platforms.

Either way, Salesforce is a long-time Microsoft competitor and, interestingly, partner who has the clout to help Slack evolve. Slack's office is in the shadow of the 62-story Salesforce Tower, the tallest building in Northern California.

Share