In what is viewed as one of the largest technology deals of the year, Salesforce has acquired Slack in a deal valued at $27.7 billion. This is the largest acquisition in the 21-year history of Salesforce. The leading software giant's acquisition of the enterprise communications platform in a cash+stock deal is aimed at giving Microsoft tough competition.
Salesforce Founder and CEO Marc Benioff hailed the acquisition and called it a "match made in heaven." The deal comes at a time when reliance on remote work and tools has grown significantly due to the COVID-19 pandemic, and Salesforce stands to benefit from it.
"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," Benioff said in a statement.
Slack CEO and co-founder Stewart Butterfield shared the same sentiment and enthusiasm towards the deal. Post-acquisition, Slack will still be led by Butterfield.
"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 Stewart Butterfield, CEO and Co-founder, Slack.
Deciphering Salesforce+Slack deal
The acquisition of Slack is going to create the operating system for the new way to work. Slack will become the new interface for Salesforce Customer 360 and also help the workforce IM to pave its way into the enterprise communications platform.
But the industry experts are seeing this deal as a way for Salesforce to better position itself against software giant Microsoft. The deal might also pour salt on some old wounds as Microsoft was looking to buy Slack four years ago, but the deal never happened. As a result, Microsoft Teams was born. Over the years, Microsoft demonstrated its might to give Teams the much-needed boost and it now serves nearly 10 times more users than Slack, BBC reported.
Interestingly, the deal puts Slack's users' worth at a whopping $2,333.3 per user and $197,183 per paying subscriber. Slack has 12 million daily active users and 142,000 paying customers, Jayadevan P K, Evangelist at Freshworks for Startups, noted.
With SalesForce backing, Slack is better placed to compete against Microsoft. But Benioff clearly hasn't forgotten the deal that slipped between its fingers in 2016, when Microsoft successfully acquired LinkedIn.
"For Benioff, this is all about Microsoft. It's just clear Microsoft is moving further and further away from Salesforce when it comes to the cloud wars," Wedbush Securities analyst Dan Ives told ET.
Under the terms of the Salesforce deal, Slack shareholders are to receive $26.79 in cash per share. They will also receive some shares in Salesforce.