When someone acquires a company, they get its customers, its product, and its brand. Salesforce just paid $27.7 billion for those things of Slack.
(Of course, there are other aspects not discussed in this article, such as its people and patents, and financial concerns.)
They got Slack’s Customers
In its press release for this acquisition, salesforce says they want this combination to create “the operating system for the new way to work”. Salesforce is known for its dominance in the CRM market, but they have made less progress in the Unified Communications (UC) or Communication Platform as a Service (CPaaS) markets.
With communication services becoming increasingly essential, an ecosystem with just a CRM and not Communications might just not be cutting it, so this is a great move to help salesforce Capture those customers looking for either or both: existing CRM customers looking to expand their communication capabilities are more likely to stay for a single vendor; small and medium business customers already on Slack will also have an easier time onboarding to Salesforce.
For those customers shopping around for suites of business applications, this consolidation could make salesforce more attractive when put against polymath competitors such as Microsoft (Office 365+Dynamics).
They got Slack’s Product
“Digital by default” is an increasingly popular phrase used by companies like Shopify (N.B. a Slack customer) to describe the future. If we accept the notion that Salesforce needs to expand its presence in the Communications market to adapt to a future digital by default, it’s not hard to see why would they want Slack the product: This is a very competitive market, with players such as Microsoft, Zoom, Google, Cisco, etc. already having a head start. Catching up to these products from scratch would be pretty difficult, but buying into this market might be easier — if the price is right. (It indeed could be: Salesforce has been enjoying strong financial results, while Slack still operating at a loss)
They got Slack’s Brand
Finally, adding Slack to its portfolio of products can bring fresh perspectives to Salesforce’s pop cultural image. Compared to Slack’s trendy brand and popularity among younger workers and entrepreneurs, Salesforce is usually perceived as a more conservative solution used by the big companies. Case in point, Slack’s customers include Instacart, Airbnb, Pinterest, Lyft, etc., while Salesforce’s top customer stories on their website feature Kone, Southwest Airlines, Marriott and T-Mobile.
This move to acquire slack could help salesforce take a step further to change that perception, which could be crucial not only in appealing to younger businesses, but also in attracting the next generation of tech workers.