I find enterprise software fascinating because it operates the entire economy and yet it frequently neglects every single principle of quality that software people may espouse. Slack is/has been the anti-enterprise enterprise tool — a real product, using web technologies, with emojis. So it’s fun to think through this acquisition. I have absolutely no inside knowledge. Press release via Business Wire.
Salesforce Signs Definitive Agreement to Acquire Slack
Okay here we go! God I love a good acquisition press release. Salesforce actually has good PR that likes to sell, fittingly. Your typical tech giant’s PR is absolutely unreadable. Let’s see what we get. I hope at the very least that they replace the Slack “brush knock” tchk-tchk-tchk with the sound of Marc Benioff yelling “Ohana!”
Combination of #1 CRM platform with the most innovative enterprise communications platform will create the operating system for the new way to work, enabling companies to grow and succeed in the all-digital world
Strong out of the gate. No, that’s not what an “operating system” is, but whatever. No one cares.
SAN FRANCISCO — (BUSINESS WIRE) — Salesforce (NYSE: CRM), the global leader in CRM, and Slack Technologies, Inc. (NYSE: WORK), the most innovative enterprise communications platform, have entered into a definitive agreement under which Salesforce will acquire Slack. Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce’s common stock on November 30, 2020.
Sure, $28 billion. Absolutely makes sense. The world makes a lot of sense and this is one of the things that makes the most sense. Alternately, they got a steal; Slack was on a path to being 4–5x bigger. Can’t decide which. Doesn’t matter. What color is water? How long would it take to bicycle to the moon?
Combining Slack with Salesforce Customer 360 will be transformative for customers and the industry. The combination will create the operating system for the new way to work, uniquely enabling companies to grow and succeed in the all-digital world.
“Salesforce Customer 360,” man, that’s a lot to have in your mouth at once. That’s like swallowing marbles. I looked it up and it’s kind of like CORBA for Cloud, but the C stands for Customer. It gives you a way to have a common representation of customers across your cloud services, and then to operate on those records from different platforms. I don’t know. If I was living inside of Salesforce I’d probably think it was cool. I love data interchange.
“Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it,” said Marc Benioff, Chair and CEO, Salesforce. “This is 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. I’m thrilled to welcome Slack to the Salesforce Ohana once the transaction closes.”
Man you gotta love Benioff (I mean, you don’t but he’s going to try), he clearly worked for Larry Ellison, loved Larry Ellison, and then said, I will be the absolute opposite of Larry Ellison and yet still build the most phallic building in history. Just pure force of personality, progressive politics, utterly willing to make enormous deals, knows what he’s doing even if no one else does. I’ve told many tech-focused editors over the years to pay attention to him but you can see their brains go blank at the thought of that much enterprise-ness. “Match made in heaven.” That’s right. “Ohana.” Means family. Double down, go, go, gooooooo. BUSINESS. FAMILY. BELIEVE. GO. DO. WHAT IF DREAMFORCE NEVER ENDED WHAT IF DREAMFORCE WAS ALL YEAR LONG. I’d love to be inside of Marc Benioff’s head for a day. He’s the anti-Elon Musk. Any challenge you have, it just needs more Salesforce and more Ohana and you can solve it. And you’re not wrong! YOU’RE NOT WRONG.
“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, Slack CEO and Co-Founder.
Okay so. A leeetle less Ohana energy here.
“As software plays a more and more critical role in the performance of every organization, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility.
Hey Jim! Oh hey what’s up Mikaela? Oh nothing just creating a greater degree of alignment and organizational agility. Oh cool well I’ll leave you alone.
Personally, I believe this is the most strategic combination in the history of software, and I can’t wait to get going.”
All righty. Pulled it out in the clinch. Ohana all the way.
Acquisition to Create the Operating System for the New Way to Work
Sometimes you just smash that keyboard, look at the screen, and go YEAH ALL RIGHT.
The events of this year have greatly accelerated the move by companies and governments to an all-digital world, where work happens wherever people are — whether they’re in the office, at home or somewhere in between. They need to deliver connected experiences for their customers across every touchpoint and enable their employees to work seamlessly wherever they are.
Man, this says absolutely nothing specific about anything. The raw hot synergy coming off this paragraph could merge lead into gold. Let’s keep going.
Together, Salesforce and Slack will give companies a single source of truth for their business and a unified platform for connecting employees, customers and partners with each other and the apps they use every day, all within their existing workflows.
I guess this is the big idea? You’ll be on Slack and all the things you need to do to not get fired will be flying at you as little apps inside Slack. If Salesforce Customer 360 is a data/object hub-thing for integrating different kinds of customer data, Slack is the human/messaging hub. Slack is a human/software hybrid feed platform masquerading as a chat client already, so this will be like, we are going to wire it into the nexus of all customer data, and we will make groups of people superintelligent. In general though it’s (1) the way things are going; and (2) sort of normalizes Slack as an API for every possible enterprise task. This is good for business.
Slack to Become the New Interface for Salesforce Customer 360
Keep saying it! Make it real!
Salesforce is the #1 CRM that enables companies to sell, service, market and conduct commerce, from anywhere.
This is true. It’s pretty powerful. God knows I’ve seen some grisly implementations but nonetheless.
Slack brings people, data and tools together so teams can collaborate and get work done, from anywhere.
Also true!
Slack Connect extends the benefits of Slack to enable communication and collaboration between a company’s employees and all its external partners, from vendors to customers.
Weird they’d bring this up — Slack Connect is what lets you have multi-organization channels — as the Big Thing. Not sure why that gets pride of place here.
Slack will be deeply integrated into every Salesforce Cloud.
Salesforce refers to what most people call “cloud services” or “cloud platforms” as “clouds”; it’s a little confusing. Just one of their little Salesforce thingies. Salesthingies? Thingforces?
As the new interface for Salesforce Customer 360, Slack will transform how people communicate, collaborate and take action on customer information across Salesforce as well as information from all of their other business apps and systems to be more productive, make smarter, faster decisions and create connected customer experiences.
Okay.
Slack To Expand Enterprise Footprint as Part of the World’s #1 CRM
Okay this makes sense…
Slack serves leading organizations in every industry around the world, from the fastest growing startups to Fortune 500 companies, such as Starbucks, Target and TD Ameritrade, along with leading academic institutions, non-profits, and governments in more than 150 countries.
TD Ameritrade baby! Also “non-profits” and “academia” whatever those are. But TD Amerrrrritraaaade!
As part of the world’s #1 CRM, Slack will be able to expand its presence in the enterprise, not just among Salesforce customers, but for any company undergoing digital transformation.
This is one of the interesting parts, to me. Slack is the best example of product-led growth around. Come for the free tier, stay for the TD Ameritrade enterprise rollout, create billions in value. But translating product-led hockey-stick growth into the linear enterprise sales growth, where your customers are now deputy CTOs of Fortune 100,000,000 companies, is a grim business. It’s kind of anti-product work. The giant enterprise clients aren’t product-focused orgs, but they start to have demands on your roadmap. Building out products for those customers is incredibly hard and the companies that have done it are the ones you know: Amazon, IBM, Microsoft, Oracle, SAP, and Salesforce. Salesforce has a loud, goofy, proactive, enormous enterprise culture that is the least likely to destroy the product vision for Slack. People seem to like working there. So if you were Slack and saw a lot of risk in building out an enterprise culture that could scale to $100 billion in revenue around your product roadmap, while Salesforce already has one and can actually use your product roadmap, getting bought by Salesforce would feel like a huge relief. I truly don’t know, though. I know lots of people at Slack but haven’t talked with anyone really since the pandemic started. Sorry if I mis-speculated.
Upon the close of the transaction, Slack will become an operating unit of Salesforce and will continue to be led by CEO Stewart Butterfield.
Everyone wins. In general Salesforce doesn’t wreck what it acquires. There’ll be lots to do. It could be genuinely good for Slack as a product in the long run.
Combination to Form the Largest Open Ecosystem of Apps and Workflows for Business
…True! Especially when you consider the Slack App world, and the number of giant things built atop Salesforce, and also the vast and infinite universe of Mulesoft.
Connecting people and data across systems, apps and devices is one of the biggest challenges companies face in today’s all-digital world.
Boy is it.
Slack’s open platform seamlessly integrates with more than 2,400 apps that people use to collaborate, communicate and get work done. With the largest enterprise app ecosystem, the Salesforce platform is the easiest way to build and deliver apps to connect with customers in a whole new way.
This is handwavy, but sure. Worth a try.
Together, Salesforce and Slack will create the most extensive open ecosystem of apps and workflows for business and empower millions of developers to build the next generation of apps, with clicks not code.
This is the part that’s a really big deal, maybe, and Slack has the product intelligence to pull this off in a way that a broad consumer base will find usable. Slack gets enterprise sensibility and sales culture, Salesforce gets Slack’s product focus. I’m guessing the idea here is that you’ll have Salesforce Clouds over here, Salesforce 360 over here, and you’ll have Mulesoft Mule Connectors, and you’ll configure everything, glue it together, and Slack will become the interface that people use to do the work, chat, assign tasks, review things, etc. This makes a lot of sense to me. Salesforce has always been enterprise-first, whereas Slack has been focused on product experience. Not that Salesforce doesn’t have good product experiences, it’s just…Salesforce.
As a result Salesforce has this vast portfolio of services where everything plugs into everything else and they promise you can build anything in a day but it somehow takes 18 months. And there’s no real…client or terminal for Salesforce. Just the web. There are a lot of web views and the Apex programming environment, and APIs, and so forth.
So if Slack is going to become the smart, interactive, group-based terminal interface for logging into the Salesforce mainframe…yeah, okay. Enterprises will love that. Apple doesn’t care, Microsoft won’t be able to achieve that with Teams because it still thinks people like interacting with services through windows, if not Windows. Oracle would never do anything this weird. Amazon might eventually rise up and do damage here. SAP might try but then it would have a 90-month emoji services rollout with enterprise emoji approval framework that is limited to six emoji per user per month.
Maybe this is a bet on a kind of post-GUI future where everything is a stream of conversation and “work” flows in and out of the channels, as opposed to a document-centric view of the world. And then you move like a freight train, or a Benioff-faced Thomas the Tank Engine, into more and more of ERP, eating away at SAP and Oracle, roping in more of the big consulting firms to your very own vision, and it’s playful, and a little dude in a bear costume keeps dancing and dancing, forever.
It’s possible! Or maybe they’re just gonna jam Slack in the middle of Salesforce and cross their fingers. I tell you, I wish my brain didn’t care about enterprise software, but I just remain fascinated. It’s so much stuff in there.
[Tons of boilerplate snipped.]
BofA Securities, Inc. is serving as exclusive financial advisor to Salesforce and Wachtell, Lipton, Rosen & Katz and Morrison & Foerster LLP are serving as legal counsel to Salesforce. Qatalyst Partners LP and Goldman Sachs & Co LLC are serving as financial advisors to Slack. Latham & Watkins LLP and Goodwin Procter LLP are serving as legal counsel to Slack.
Congratulations to money!
Who is this good for?
I have five-ish personas that I like to refer back to.
The mutual aid group helping with food insecurity in the neighborhood. This isn’t for them. They’ll keep using free Slack as long as they can, but they’re going to organize data with AirTable or Monday.com or just Google Sheets.
The headquarters of the office furniture distributor. They’re going to stay with Microsoft unless something magical happens. Dynamics is great, Teams is fine, buy your chair. Slack is for babies.
The graduate school program in design. They use lots of Slack, and manage admissions through a custom education-optimized Salesforce. It’ll be pretty complex to bring these two worlds together, though.
The 500-person consulting firm with six-month contracts. This is 1000% for them, yep.
The state health & social services agency. They might already use Salesforce for case management, with some horrible Mulesoft connection to Epic that doesn’t really work. They will LOVE Slack, emojis will feel like a revelation to them, &c.
