Salesforce signs agreement to acquire Slack
In a reported $27.7 billion deal, the CRM giant picks up the popular chat platform. Updated.
As the bell rang to close the New York Stock Exchange at 4pm EST Tuesday, investors, Salesforce and Slack users, and the martech community at large, were awaiting the anticipated announcement of a multi-billion acquisition of the popular collaboration platform by the CX and CRM giant. Slack already has close integrations with Salesforce, but the acquisition would represent a dramatic entry by the latter into the project management and collaboration space.
Then the news came. Salesforce announced it had signed a definitive agreement to acquire Slack in a $27.7 billion deal.
Some are seeing this as a smart move by Salesforce. Others — especially Slack users — are concerned about a well-liked tool (with a free option) being swallowed up by a much larger corporation. We had reached out to some commentators in anticipation of the news.
The Slack consultant’s point of view. David Markovich is not only a Slack power user; he’s also the founder of Slack consulting firm ChatOverload, and presides over OnlineGeniuses, the Slack-based digital marketing and SEO community. We asked him for a quick reaction to the news. “I think it’s interesting, Salesforce getting into the project management, internal communications space. It made me wonder, what took them so long? I’m betting on Salesforce — I’m excited to see what will happen.”
Was he concerned by speculation that this could mean an end to the free Slack experience? “Would they pull the plug on free users, or would they do the opposite?” he said. “Would they start supporting communities? That would be a beautiful thing.”
Consolidation? Scott Brinker, editor of chiefmartec.com, sees this as an example of simultaneous consolidation and diversification in the martech space. He told us: “The martech industry is increasingly structuring itself as a small number of consolidated platforms with large and diverse ecosystems of apps orbiting around them. Slack created a remarkable ecosystem of thousands of apps and integrations around its collaboration and communication platform. If Salesforce upholds Slack’s open platform principles moving forward, I think there’s a lot of opportunity for growth ahead for them. The more consolidated platforms are, the more diverse the app ecosystems around them can become.”
A former Salesforce executive. Gregg Johnson, CEO of conversation intelligence platform Invoca, was formerly an executive at Salesforce, and worked on the community and collaboration tool Salesforce Chatter. He said: “Acquiring Slack would be a game changer for Salesforce. It gives it the opportunity to turn itself into a digital network where businesses can interact. Salesforce has ambitious plans to grow beyond sales, service and marketing teams. The acquisitions of Mulesoft and Tableau were a first step in unifying back office and front office data, but both of those tools are used by a relatively small set of power users. Acquiring Slack would represent an important second step in this direction by extending Salesforce’s reach to all employees across the organization.”
Update: Salesforce CEO Marc Benioff told CNBC: “Slack changes everything and makes Salesforce a whole new type of company. Customers are rearchitecting how they are working. Now with Slack, it provides this incredible credible window into a collaborative interface onto all of our services and the whole enterprise itself.” Benioff also said his “dream” was to double Salesforce’s annual revenue to $50 billion.
Why we care. This is the biggest acquisition in the history of Salesforce, a company which has to a large extent built out its offerings through acquisitions. It looks like the second biggest acquisition of the year in the tech space, after Nvidia’s $40 billion deal to acquire Arm (which is under close regulatory scrutiny). It’s a signal that Salesforce is prepared to take on Microsoft, which offers Microsoft Teams as a chat and collaboration tool. Finally, for many of us, this strikes close to home: who hasn’t been a Slack user at some time?