Product Sense Analysis: Salesforce buys Slack for $27.7B
Salesforce announced in an earnings call on December 1 that it will acquire Slack for $27.7B. Is this a smart move? Does it make sense for SaaS giant to buy a workplace communications management company?
This is not the first time Salesforce has made multi-billion $ sale. Notably, it acquired Tableau in 2019. This was a decision that impacted revenue and technology strategy since Salesforce has a big customer base and Tableau can help with visualization to understand overflowing data as companies move to digital. It also made multi-billion-dollar acquisitions such as MuleSoft.
What is Salesforce?
Salesforce is a leader in the Customer Relationship Management platform that is cloud-based. It provides SaaS to companies to manage sales, customers, marketing, and relevant teams into one platform. Over 150,000 companies use Salesforce to understand and keep their customers happy.
What is Slack?
Slack is a workplace communications management and platform that allows teams to communicate in real-time. It allows members to communicate individually or in teams through various channels. It also integrates functions such as Google suite to add functionalities.
Why did Salesforce buy Slack?
There can be so many reasons for this acquisitions. Slack is highly viral and has a pleasing user interface. It has about 12 million daily active users. In comparison, Microsoft Teams has 115 million daily active users.
Technology strategy reasons:
- Slack can benefit from Salesforce products and add more value to users.
- Slack has a much younger and energetic vibe.
- Can enter and expand in collaboration space. This is a growing industry.
Revenue reasons:
- Salesforce will fuel cash to Slack so that they can build software and pump resources.
- Roughly 90% of Slack’s enterprise users use Salesforce.
This acquisition will better position Slack and Salesforce to compete against Microsoft in the collaboration space.
Future use: ⭐️⭐️⭐️
Revenue potential: ⭐️⭐️⭐️⭐️
Technology expansion: ⭐️⭐️⭐️
