Salesforce, which is owned by Marc Benioff, has acquired Slack Technologies Inc., a company which offers a workplace-communications application. Slack competes directly with Microsoft which offers a similar service called Teams which comes with Microsoft 365.
Ironically Marc Benioff almost sold Salesforce to Microsoft five years ago.
Salesforce will acquire Slack for $27.7 billion. Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce’s common stock on November 30, 2020.
Slack, which until now has been and independent company, offers a channel-based messaging platform, which has millions of users. The platform allows users to align their teams and unify their systems, even while working miles away from one another. Slack boasts that it allows people to work together more effectively, connect all their other software tools and services, and find the information they need to work.
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Slack will be deeply integrated into every Salesforce Cloud. It will be the new interface for Salesforce Customer 360, and boasts that the company will now transform how people communicate, collaborate and take action on customer information across Salesforce as well as information from all of their other business apps and systems to be “more productive, make smarter, faster decisions and create connected customer experiences.”
Obviously such systems are more important than ever during the Corona Virus shutdowns. But in the age of globalization and advanced telecommunications firms were already hiring employees who live in different parts of the world. Now a business needs neither move, open new offices in another location, nor even offer incentives to get experts in their fields to move to where they are located. Teams can work on the same projects from all corners of the globe at the same time.
“Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it,” said Marc Benioff, Chair and CEO, Salesforce. “This is a match made in heaven. 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. I’m thrilled to welcome Slack to the Salesforce Ohana once the transaction closes.”
“It’s a marriage made in heaven, and we could not be more excited.”
Salesforce CEO Marc Benioff discusses the Slack deal https://t.co/WIfMZwhDr4 pic.twitter.com/i2Mo2xQG00
— Bloomberg TV (@BloombergTV) December 2, 2020
So what does this have to do with Microsoft?
Well Microsoft is attempting to develop the same kinds of services as Slack. And it has more than ten times the cash on hand to do it with than Slack and Salesforce do combined. Microsoft its own platform called Teams through its Office suite of programs which have 115 million users on a daily basis worldwide. Slack, in contrast, only has about 12 million current users.
ABC News explains how Microsoft offers its own online suite of services, known as Office 365, which includes the Teams chatting service that has many features similar to Slack’s.
Over the summer Slack filed an official complaint with authorities in the European Union which accused Microsoft of illegally bundling Teams into Office 365 in a way that blocks its removal by users. Slack says that people who prefer its service would wish to do just that.
If this sounds familiar it’s because Microsoft did the same thing when it first created its Office bundle. Since then no one who just needs a word processing program can buy just MS Word, and no one can get just MS Excel. Microsoft also embedded its Explorer internet browser into Windows. The company was accused by its competitors of making such moves only to drive out the competition.
We’re thrilled to be acquiring Slack!
Combining @SlackHQ with #Customer360 will be transformative, creating the operating system for the new way to work. Together, we’ll enable companies to succeed in the all-digital, work-from-anywhere world.
Important: https://t.co/bRXZ1Iu1fj pic.twitter.com/xcPH5hRb6J
— Salesforce (@salesforce) December 1, 2020
And this may also all be a personal matter for Marc Benioff who once tuned down an offer to be bought out by Microsoft.
“For Benioff, this is all about Microsoft,” Wedbush Securities analyst Dan Ives told ABC News about Tuesday’s deal. “It’s just clear Microsoft is moving further and further away from Salesforce when it comes to the cloud wars.”
Marc Benioff had a lot to say to CNBC host David Kramer on the Mad Money show. “I have a $50 billion (revenue) dream, which is what I’m shooting for,” said Benioff. “I feel very excited and motivated on everything that we need to do to double the company once again, and to make that happen we have to architect a complete solution”
At another time, When asked about Microsoft, Marc Benioff said, “What’s that company? How do you spell it?”
“Slack changes everything and makes Salesforce a whole new type of company,” Benioff said of the deal.
“Customers are rearchitecting how they are working,” he added. “Now with Slack, it provides this incredible credible window into a collaborative interface onto all of our services and the whole enterprise itself.”