Salesforce acquires Slack for a whopping $27.7 billion

Humza

Posts: 779   +161
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What just happened? In its biggest acquisition to date, Salesforce has bought enterprise communication and collaboration app, Slack, for $27.7 billion. The deal is said to bolster Salesforce's offerings in the business software space that's aggressively expanding in the face of pandemic-enforced remote work culture, and for improving the experience of Salesforce's existing customers who'll be able to benefit from Slack's deeper social integration with the company's CRM software.

Salesforce has picked up Slack in a landmark deal for both companies, a combination that Salesforce CEO, Marc Benioff has termed a "match made in heaven." Although this development will help the CRM giant expand its enterprise footprint against rivals such as Oracle and Microsoft, its timing has been deemed crucial for Slack, which has faced fierce competition from business communication apps, including Zoom and Microsoft Teams.

Despite a steady increase in daily active users, Slack had been struggling financially since its IPO last year, losing around 40 percent of its value entering 2020. The company posted two sequential quarterly losses in this pandemic-stricken year that's made remote work apps essential for most businesses, resulting in massive user growth and revenue for the sector.

Under this new agreement, Slack CEO, Steward Butterfield, will continue to serve in his current position as his co-founded company is made an operating unit of Salesforce. He will oversee the tool's deeper integration with the CRM-giant's portfolio of cloud services, where it'll also become "the new interface for Salesforce Customer 360."

Butterfield has called it "the most strategic combination in the history of software," allowing Salesforce to position itself better against cloud competitors like Oracle and Microsoft. The latter was reportedly interested in acquiring Slack for $8 billion back in 2016 (less than one-third of this deal) but instead decided to focus on Teams for its Office 365 business suite.

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Uncle Al

Posts: 7,797   +6,452
Old age must be here at last. If you consider the equity or even the debt ratio, there is little if any chance for this to ever pay for itself, unless it's purely an investment that will be repaid when they turn around and re-sell it .... no?
 
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mbrowne5061

Posts: 1,735   +988
Old age must be here at last. If you consider the equity or even the debt ratio, there is little if any chance for this to ever pay for itself, unless it's purely an investment that will be repaid when they turn around and re-sell it .... no?
Hard to say. Slack certainly was on the decline (they were the Snapchat of business organization: novel but not special, and missed their chance to sell high), but if you combine it with Salesforce's offerings, I can see it becoming a valuable tool. Certainly, no one is going to be giving Saleforce money just to get Slack, but Slack may provide the platform to sell more Salesforce software.
 
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zamroni111

Posts: 154   +125
Sales force just wastes 26+ billion dollars.
Microsoft teams has advantages off being built-in into existing office 365 at no additional costs.
No one will buy sales force subscription just because it has slacks