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What you need to know about the $28bn Slack-Salesforce deal

The Drum 02 Dec 2020 12:00
Cloud-based software company Salesforce has placed a £20.6bn bet on remote working

Cloud-based software company Salesforce has placed a $27.7bn (£20.6bn) bet on remote working through the acquisition of workplace messaging app Slack. Describing the takeover as a ‘match made in heaven’ Salesforce is confident that Slack’s market value, which has doubled during the Covid-19 pandemic, will reap dividends in enabling it to compete directly with Microsoft Teams, by ushering in a new unified platform for businesses to connect with employees.

What are the details?

  • Salesforce will hand over $27.7bn (£20.6bn) to acquire Slack and level the playing field with arch-rival Microsoft, which commands the business communication market with its Teams software.

  • The multi-billion-dollar deal is by far the biggest single move by Salesforce in its 21-year history and a sign of the importance the San Francisco cloud computing pioneer attaches to the future of workplace messaging.

  • Salesforce has been facing mounting pressure from Microsoft which has eroded the market share of its customer relationship products for businesses.

  • The boardroom machinations matter to marketers, because a chat service reaching 12 million users per day combined with established business software, sales and marketing operations of Salesforce has the potential to disrupt the market.

  • By removing barriers Slack users will be able to seamlessly access Salesforce software, negating the need to turn to Microsoft which currently monopolises such products.

  • This coincides with a pronounced global shift toward digital services which Salesforce risked losing out on. Alex Zukin, analyst at RBC Capital Markets, put it succinctly: “Ultimately, it’s about Microsoft — they have it all.”

  • Outlining their rationale for opening the purse strings Salesforce president and chief operating officer Bret Taylor, said: “We see the world as fundamentally having shifted this year. We think the new way of working is permanent.”

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