What happened and why Salesforce (-5.37%) is in talks about to buy Slack (+37.59%), setting up yet another showdown with Microsoft that could shape the future of workplace software for millions, in the years ahead. 🦚 When Slack was brandishing its feathers on Wall Street before last years' IPO, Salesforce was already a keen admirer of the workplace comms giant. But the workplace pioneers' growing pains has kept Salesforce on the sidelines, until now. Slack’s fortunes have flagged a little in a year when other cloud software stocks have been a hot commodity on Wall Street, but its strategic value to Salesforce looks undiminished. And for Marc Benioff, CEO of Salesforce, his patience has been rewarded... Salesforce shares have jumped +57% in the 18 months since Slack went public. Leaving him with a nicer deal with most of the deal likely to be paid for in stock.By contrast, shares in Slack have slumped by a quarter, before the news of a takeover sent them fizzing +37%. From channel-chats to a workplace front-end... Slack is so much more than a Whatsapp of the workplace these days. With more and more software tools entering our daily lives, Slack has become the workplace comms-centre. With users now clocking in more than 10 hours a day and are active on the app for more than 100 minutes. But it is not all plain slacking... Slack has lost ground this year to a similar service from Microsoft called Teams, thanks partly to Microsoft’s decision to include its service as a free add-on to the widely-used Office suite of software tools. With the coronavirus pandemic forcing workers to adopt new forms of software to communicate, the number of people using Teams every day recently hit 115m, up from only 20m a year ago. The booming presence of Microsoft Teams has prompted Salesforce chief, Benioff to make his move. Microsoft is the leading force when it comes to cross-selling its applications after securing customer loyalty - hence Slack's move to lodge an antitrust complaint against the business last year. Bill Gates' baby is even eating into Salesforce's own relationship management market. | The Takeaway Slack's purest customer experience has won it a lot of admirers and the software is a staple for small tech businesses but converting those small businesses into paying subscribers is the hard part. The company says over 130k organisations now pay for the service, and Slack is banking on a number of those green shoots transform into the types of empires that Microsoft Teams is currently servicing. Mixed bag... After splashing out $15bn for Tableau Software last year and $6.5bn for the cloud-integrating software, MuelSoft, a year earlier, Salesforce is keen to make another run at a consumer pin-up brand, like Slack. After missing out on Linkedin and Twitter, Benioff may finally have his jewel.
