Salesforce announced in an earnings call yesterday that it will buy the workspace management app Slack for $27.7 billion in cash and stock. This is major news for both Salesforce and Slack and puts Salesforce in a position to compete with software giants such as Microsoft, IBM and Oracle.
This is major news in the SaaS world and is something that many people predicted would eventually happen. Salesforce CEO Marc Benioff is very optimistic about the purchase and says that it was a “match made in SASS heaven. The two companies will compliment each other's services quite nicely and Slack will shape the future of enterprise software and change the way people work in the digital future from anywhere in the world”.
“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,” said Slack CEO Stewart Butterfiled.”
The rise and popularity of Slack has changed it from a small rising startup originally formed as a gaming company in 2009 to a major player in the SaaS space with over 12 million daily active users as of October of 2019.
Recommended Reading: How Slack Started and its History
Slack originally started as an alternative to email when they originally started in order to better manage internal employee communication and improve project management. They faced some serious competition from Facebook and Microsoft, but managed to take their company public and raise additional capital required to improve its functionalities, marketing and management structures.
Although Slack has failed to turn a profit since they went public, their active daily users are increasing and with their new partnership with Salesforce they have the ability to turn into a powerhouse enterprise solution for businesses across the world.
With the massive changes occurring globally in the businesses world due to the coronavirus pandemic, Salesforce and Slack have become even more popular for remote workers and have helped many businesses completely transition their whole operations online. This acquisition undoubtedly puts pressure on similar SaaS companies to look for opportunities for partnerships that will put them in a position to compete and stay relevant.
Together, Slack and Salesforce will help both platforms expand and puts them in a much better position to compete with giants such as Microsoft, Oracle and IBM in the cloud and enterprise solution space.