Business software company Salesforce is buying workspace messaging platform Slack for $27.7 billion. Announced on Tuesday, the deal is “a match made in heaven”, according to Salesforce cofounder and chief executive officer Marc Benioff. The deal is expected to give competition to Microsoft, which offers software services similar to Salesforce. Microsoft Teams, on which it has doubled down efforts during the pandemic, directly competes with Slack.
“Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world,” he said in a statement. “We see in Slack a once-in-a-generation company and platform. It’s a central nervous system for so many companies,” he said on a conference call. 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. The opportunity we see together is massive”.
Slack had begun as an internal tool for Butterfield’s gaming company Tiny Speck and later launched in 2013 as a workplace communications service, serving primarily as a faster, less cumbersome communication alternative to email. Slack’s paid customers now get video meetings, file hosting, IT administration, and other features usually offered by enterprise products. However, the company lost nearly half of its market value since going public in April 2019. It has not returned profits in the last three quarters despite the pandemic resulting in a surge in remote work.
Salesforce, which gives Microsoft competition in the cloud sector, offers customer relationship management software that helps businesses manage sales online. As AP News put it, Salesforce “was one of the first to begin selling software as a subscription service that could be used on any internet-connected device instead of users having to install it on individual computers”. Going forward, Slack will be “deeply integrated” into Salesforce Cloud and will be the new interface of Salesforce Customer 360. The app will also be able to leverage access to Salesforce customers.
Salesforce also acquired multiple companies in recent years, the largest being its purchase of data analytics and visualisation tool Tableau Software last year.