The Cloud

Salesforce Goes Social With $27.7B Slack Deal

"Slack looks like the natural fit for Salesforce to beef up its collaboration and messaging footprint and keep pace with [Microsoft]."
Matthew HellerDecember 2, 2020

In its largest-ever acquisition, Salesforce is buying workplace messaging app Slack for $27.7 billion, setting up a battle for enterprise social media customers with arch rival Microsoft.

The mega-deal will make Slack’s remote communication platform available to users of Salesforce’s Customer 360 data manager in what Salesforce CEO Marc Benioff called 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,” he said in a news release.

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Slack does not disclose user numbers but says 130,000 organizations now pay for its service, an increase of 30% over the last year that reflects the shift to remote work amid the coronavirus pandemic.

Under the terms of the deal, Slack shareholders will get $26.79 in cash and 0.0776 shares of Salesforce stock in exchange for each of their shares. “Slack was ripe for the taking. Entering 2020 it had lost around 40% of its value since it went public” in April 2019, TechCrunch reported.

For Salesforce, the deal takes it further from its core business of customer relationship management and follows its purchase of the Quip collaboration platform in 2016 for $750 million. Slack is designed to work with other popular workplace tools such as Google Docs or Trello, which makes it useful for more than just chat.

“When paired with the Slack acquisition [Quip] gives Salesforce a much more robust social story to tell than its internal option Chatter, an early attempt at enterprise social that never really caught on,” TechCrunch said.

According to CNN Business, the acquisition will also “position Salesforce and Microsoft, with its Teams chat platform, as closer competitors in the remote collaboration space.”

“The core reason for this deal in our opinion is to keep pace with the cloud behemoth in Redmond,” Wedbush analyst Dan Ives said in a client note. “Slack … looks like the natural fit for Salesforce to beef up its collaboration and messaging footprint and keep pace with [Microsoft].”

Teams grew to 75 million daily active users by the end of April, up from 44 million in mid-March.

 (Photo by Noam Galai/Getty Images)