Salesforce Accelerates as it Picks Up its San Fran Neighbor Slack
- Salesforce Commerce Cloud
Nine years ago at the end of September, a game called Glitch was launched with a light force of hype pushing the massive multiplayer online game onto the public. Turning away from popular combat and war games, it would focus instead on collaborative and creative team activities.
After barely two months the game dropped into beta status after experiencing its own glitches, including issues with accessibility and lack of gameplay depth. A month later it was taken offline, buried in the deep ashes of failed internet experiences.
But under the surface, the team responsible for the development of the game was working on another initiative; a platform that would act as a Searchable Log of All Conversation and Knowledge, a Slack, if you will.
Slack provides a way for teams to communicate with each other in a way that is faster, better organized, and safer than email. Last October it revealed that it had 12 million daily active users; it doesn’t usually release regular figures of how many are using its platform. Yet since the emergence of the coronavirus, the onset of lockdown, and workers en masse finding themselves at home working remotely, those numbers must have only gone in one direction.
As a large and diverse technology company, ArganoUV actually uses Slack on a daily basis to connect ourselves, share ideas, files, and generally communicate as we would in an office. Slack is simply part of how ArganoUV operates; the communication tool to connect continents where our workforce is located.
We’ve been aware of the benefits of Slack for quite some time now, so we found it unsurprising that another technology that we intimately know on a daily basis, Salesforce – the cloud-based giant CRM service provider that includes the ecommerce platform Salesforce Commerce Cloud – just announced that it would buy Slack for the enormous price tag of $ 27.7 billion.
The history of Salesforce is a history of growth and acquisitions. And the list of acquisitions is fairly extensive but its highlights include:
- ExactTarget for $2.5 billion
- Demandware for $2.8 billion
- Quip for $75 million
- MuleSoft for $6.5 billion
- Tableau for $15.7 billion
The $27.7 billion price tag is the heaviest Salesforce has picked up. And a clear sign of strength for the cloud company. It comes at a time when digital communication has been playing a crucial role in companies whose workforce has been working from home for almost the entire year. Communicative platforms like Slack have provided millions of workers the capabilities of connecting with their teammates, wherever they are in the world.
And with many companies around the world declaring that once the pandemic fades into the background of daily life, their workforce would benefit from continuing to work from home, given the many benefits of remote working, tools like Slack are going to be playing a more important and sustained role in daily company life.
“This is a match made in heaven,” stated Salesforce co-founder and CEO Marc Benioff. “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.”
Marc went on to say: “We’ve always had the vision of the social enterprise at Salesforce for more than a decade. We’ve had Dreamforces entirely dedicated to the vision of what a collaborative interface, a high production interface with applications and an ecosystem would look like wrapped on top of our Customer 360.”
On the other end of the deal, Slack CEO Stewart Butterfield seemed equally as enthusiastic: “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.
“Personally, I believe this is the most strategic combination in the history of software, and I can’t wait to get going.”
There was a time when Salesforce ventured into making their own collaborative and communicative tool. Ten years ago, they built Chatter, a free tool for companies that use the Salesforce platform that was similar in style and functionality to Twitter and Facebook. But it didn’t quite catch fire.
“Some of the issues were technical,” said Chuck Ganapathi, the product lead on Chatter at the time. “Salesforce is a database-centric company, founded by Oracle alums on a relational DB foundation. DB applications and unstructured communication applications like Chatter or Slack represent completely different branches of computer science with little overlap.”
Despite the growing success of Slack, heading into 2020 it had lost approximately 40% of its value since it went public last summer. And before the deal with Salesforce was done, Slack had losses of almost $150 million during the two quarters that ended in July of 2020.
Yet despite its winding path to profitability, Slack sets itself apart from the many communicative tools in that it has the ability to easily integrate with other software, as well as provides a dose of artificial intelligence. Both of which are set to give Salesforce customers a powerful and centralized platform to, well, simply get stuff done.
They tried it with Chatter; now they’ve bought it with Slack.
But there’s more to this deal than the two shaking hands from San Francisco. Because there is an elephant in the room – or perhaps it’s in the Salesforce Tower. And the elephant is the size of a Bill Gates enterprise.
A few years ago, Microsoft was seriously considering buying Slack, before they decided to look internally and build its own rival: Microsoft Teams. And when Microsoft moves into your neighborhood, you look out of the window more often.
With Slack slowly being squeezed by the bigger players, the purchase by Salesforce gives an extra “umph” and confidence to the communicative tool, putting Slack on a more competitive level to its rivalry with Microsoft Teams.
Anyway, Salesforce has its own beef with its once close companion Microsoft. Just under 5 years ago, Salesforce lost out to Microsoft in their attempt to buy LinkedIn, along with all that juicy personal data of the seriously-minded business people.
But these weren’t always this way between the two major tech companies. Once upon a time, Salesforce and Microsoft were flirtatious with each other – entertaining on two separate occasions a merger between the businesses. Today, in the name of a good solid storyline fit for the screen, the two have become two titanic tech companies in an ultimate battle to the end. The only question is: who is on the side of good, and who is on the side of evil?
Within the world of technology, just like any civil war, we ultimately have to choose sides – however painful that may be. In my household alone, I am a Slacker, and my partner is a Microsoft Teamer…
PS: ArganoUV is one of the world’s leading Salesforce B2C Commerce Cloud development & strategy teams. Contact us to see how we can work together.