Friday, February 26, 2021
Home News Why Slack Agreed To Get Acquired By Salesforce?

Why Slack Agreed To Get Acquired By Salesforce?

Salesforce, a CRM platform provider, announces the acquisition deal with Slack for $27.7 billion. If the deal doesn’t hit any regulatory roadblock, it will become the biggest ever acquisition by Salesforce. Earlier, in 2019, the company had acquired Tableau for $15.7 billion. Like Tableau, Slack will also be integrated with Salesforce Customer 360.

Since the launch of Slack in 2009, the company has been at the forefront of simplifying communication for developers as well as organizations. Over the years, it integrated tons of services to make it an all-in-one platform for effective communication and process workflows. But, since the launch of Microsoft Teams in 2017, Slack has faced the heat of Microsoft’s deep pocket. And during the pandemic, when employees started working from home, the demand for collaboration rose exponentially, and Slack failed to capture most of the market.

Even though Slack was uniquely positioned to capture the gamut of the market share, the company struggled to compete with Microsoft’s sales workforce, thereby losing its advantage in the market. Although Slack quickly integrated necessary services like video calling of different platforms, Teams increased its ambit quickly in the collaboration tool since it offers office suite to organizations. Teams made a lot of sense for organizations than Slack due to its deep integration with office products.

Also Read: Facebook Acquires Kustomer, A CRM Provider

This is yet another example of the rising monopoly of blue-chip companies that force small companies to get acquired. Google, another tech giant that only realized the importance of collaboration tools, is actively revamping since the pandemic. With meet, chat, and rooms, Google is also tapping into the market for ease of collaboration. Slack could sense Microsoft’s increasing dominance and witness the change in strategy by Google, which could eventually impede its business. 

While collaboration tools like Zoom saw a sharp increase in stock price during the pandemic, Slack’s stock was trading below $38 per share, which was the opening trading price when Slack went public on NYSE last June. Slack was struggling when the market for collaboration tools was hot during the early part of the year. In such circumstances, one of the best bets for a company is to get acquired.

And what better partner other than Salesforce would Slack have had agreed to make this acquisition deal? Salesforce has a deep penetration in organizations with a must-have CRM tool. With the integration of Slack with Salesforce, it has the potential to streamline the business process within organizations. Maybe, now, the competition for the market share for collaboration tools is even; Salesforce can fight shoulder to shoulder with Microsoft. At the same time, Google will now not have a straightforward path to penetrate the market. But, people would not complain even if Google comes into the ground zero with Microsoft Teams and Salesforce’s Slack vying for the top spot.

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Kenny Manuel
Kenny Manuel is a tech enthusiast who likes to write about the latest developments in the artificial intelligence industry. However, his interest mostly lies in mergers and acquisitions of AI-based companies.

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