Business software pioneer Salesforce.com buys online chat service Slack for $ 27.7 billion in deal to give the two companies a better chance to compete with longtime powerhouse from Microsoft industry.
The acquisition announced Tuesday is by far the largest in Salesforce’s 21-year history. The San Francisco-based company was one of the first to start selling software as a subscription service that can be used on any Internet-connected device instead of the more tedious process of installing programs on PCs. personal computers.
The flamboyant founder and CEO of Salesforce, Marc Benioff, hailed the concept of “cloud computing” as the wave of the future with much derision at first.
But software as a service has become an industry standard that has become a gold mine for longtime software makers. Microsoft for its part has developed its own thriving suite of online services, known as Office 365, which includes a Teams chat service that includes many of the same features as the six-year-old Slack app.
In July, Slack filed a complaint in the European Union accusing Microsoft of illegally consolidating Teams into Office 365 in a way that blocks its removal by customers who prefer Slack.
Microsoft is also a threat to core Salesforce products, a line of tools that help other businesses manage their customer relationships.
“For Benioff, it’s all Microsoft’s business,” said Dan Ives, analyst at Wedbush Securities. “It’s clear that Microsoft is moving further and further away from Salesforce when it comes to cloud warfare.”
Salesforce is building on its success in recent years to branch out into other areas, largely through a series of acquisitions. Last year, the company bought data analytics specialist Tableau Software for $ 15.7 billion. Salesforce was also among the companies that offered to buy LinkedIn in 2016 before Microsoft did.
Slack, on the other hand, has not proven to be as popular with investors, although its service launched publicly in 2014 is increasingly used by businesses and government agencies looking for more agile alternatives to email. . Before news of a potential deal with Salesforce surfaced last week, Slack’s stock was still hovering around its original listing price of $ 26 when the company went public almost 18 months ago. .
“This is a great exit strategy for Slack,” said Kate Leggett, analyst at Forrester Research. “Microsoft Teams eats Slack’s lunch.”
But Leggett said it’s also “really good for Salesforce” to add a popular collaboration tool to its own software suite, which focuses on customer relationship management for businesses and government agencies. She said the need for customer relations officers and other Salesforce users to rub around a topic and collaborate remotely has only grown with the coronavirus pandemic that has fired so many employees from home office and made many addicted to new online tools.
“I think the pandemic played a major role” in paving the way for the deal, Ives said. “Zooms, Slacks, Microsoft Teams, it’s going to be a new part of the workforce.”