In its largest acquisition to date, Salesforce has bought messaging app Slack for a whopping $27.7 billion. The deal is still to be approved by the relevant regulatory bodies but is expected to conclude towards the end of Q2 2021.
Salesforce started life and has grown into a behemoth as a sales management software provider, among other cloud services, to businesses around the world. Slack, meanwhile, has become a major player in the real-time messaging service industry. Slack has suffered slightly in 2020, contrary to what you would expect for an industry bolstered by pandemic quarantines and lockdowns, in part due Microsoft adapting its similar Teams product to compete strongly among enterprises.
Marc Benioff, co-founder and CEO of Salesforce, said that “we’re going to help them [Slack] to just redefine the entire industry.” In a conference call with analysts he added: “When the moment and the opportunity arises, you have to look and ask yourself, are you strong? Can you do something like this? Or are you weak? Or is it a moment where you just don’t have the swagger? And let’s face it. Look at these numbers we just delivered. Salesforce has never been stronger, never been more capable, it’s never had a more competitive position.”
Big news: @salesforce is acquiring Slack! 🎉 This is going to be transformative for our customers. Together, we’ll deliver the operating system for the new way to work: https://t.co/4wYTX2BQoz
This major acquisition, nearly double the price tag of its second biggest acquisition of Tableau for $15.7 billion in 2019, is a major step in competing with Microsoft across a broad range of software products. In the past Benioff has stated he has a “$50-billion dream” for Salesforce’s annual revenue, which would put it second worldwide only behind Microsoft.
Salesforce has seen record growth in 2020 as it assisted businesses affected by the global pandemic transition to the cloud. The Financial Times has also reported in the past that Salesforce has been looking for a customer-facing product for some time. Slack founder and CEO Stewart Butterfield will continue to lead the messaging business, which will become an operating unit within Salesforce.