Salesforce buys Slack — a $28B bet on remote working

A major acquisition is happening in the business software industry.
2 December 2020
  • Salesforce has confirmed the US$27.7 billion purchase of enterprise communication and collaboration platform Slack
  • Slack will maintain its management team and business priorities for now, but will also be deeply integrated with Salesforce’s customer-centric cloud solutions has agreed terms to buy workplace productivity app Slack Technologies Inc. in a US$27.7 billion acquisition today, that sees the global customer service solutions provider shoring up its cloud-based enterprise software suite with one of the leading work collaboration platforms on the market.

The deal came to fruition following rumors last week alleging the same, causing the collaboration tool’s stock price to spike. The acquisition is expected to be solidified during the second quarter of 2021, following regulatory approval and the requisite due diligence.

Under the new arrangement, Slack founder and CEO Stewart Butterfield will continue to lead the messaging platform, which will become an operating unit within CRM behemoth Salesforce, the companies said. In a statement, Salesforce revealed that Slack would be “deeply integrated into every Salesforce Cloud,” and that Slack “would become the new interface for Salesforce Customer 360,” the company’s customer management platform.

In an internal memo announcing the sale to employees, Butterfield said that joining with Salesforce would be “transformative” for both companies and that Slack would retain its identity as part of Salesforce. “Our mission, vision, objectives, priorities, values, and ambitions remain the same,” he wrote. “We’re not changing our roadmap, or our brand, or the way we do business.”

The near-overnight, large-scale shift towards remote working and collaboration arrangements this year had seemed like a major boon initially for Slack, with its cloud-based messaging, seamless off-platform integrations, and crowd-pleasing enterprise interface. But pushback from well-established competitors with enterprise communication alternatives like Microsoft Teams, Google Meet, Cisco Webex, and Zoom Communications Inc. saw Slack losing market share, often to more well-rounded products.

Complementing Slack’s internal messaging and interface features with Salesforce’s chatbots and streamlined workflow processes should be a winning combination for Salesforce’s enterprise customers, freeing them from attention-heavy, mundane internal communications to better focus on enhancing customer journeys and more resource-intensive tasks.

“As software plays a more and more critical role in the performance of every organization, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility,” Butterfield said in a statement. “Personally, I believe this is the most strategic combination in the history of software, and I can’t wait to get going.”

Salesforce’s legendary co-founder and CEO Marc Benioff was equally gushing over the deal, which should be firmed up by mid-2021. “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.”