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Salesforce to Buy Slack in $27.7 Billion Deal
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Salesforce announced that it plans to buy Slack Technologies — provider of the popular workplace-messaging system — in a cash and stock deal worth $27.7 billion. Slack will become an operating unit of Salesforce and will continue to be led by founder and CEO Stewart Butterfield. With this acquisition, Slack will become the new interface for Salesforce Customer 360. Moreover, Slack will be “deeply integrated” into every Salesforce Cloud, the company announced.
NEW Acquisition:
Salesforce signs definitive agreement and acquires Slack
Connecting people and data across systems, apps and devices is one of the biggest challenges companies face in today’s all-digital world.
The combination of Salesforce and Slack will create the most extensive open ecosystem of apps and workflows for business.
This strategic acquisition will empower millions of developers to build the next generation of apps, with clicks not code.
Salesforce X Slack: Why this strategic combination is a game changer?
The Best combination to increase productivity and Ensure flawless Workflows
Connecting people and data across systems, apps and devices is one of the biggest challenges companies face in today’s all-digital world. The deal is the biggest bet among a recent spate of acquisitions made by tech companies to capitalize on the shift to remote work.
The combination of Salesforce and Slack will create the most extensive open ecosystem of apps and workflows for business.
This strategic acquisition will empower millions of developers to build the next generation of apps, with clicks not code.
" 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."
Salesforce is the #1 CRM that enables companies to sell, service, market and conduct commerce, from anywhere. On the other hand, Slack brings people, data and tools together so teams can collaborate and get work done, from anywhere.
But the core driver of the deal was to help Salesforce compete with Microsoft’s Azure/Office 365 cloud stack and Microsoft Teams enterprise collaboration solution, according to Wedbush Securities analyst Dan Ives.
SLACK: A Journey strewn wITH CHALLENGES
The opportunities of this acquisition are endless for both parties. However, Slack has encountered quite a lot of challenges along the way.
The Vancouver communications software company Slack was founded by in 2009 by Stewart Butterfield.
The communications software company went public on the New York Stock Exchange via direct listing in 2019 but its shares have traded below the initial offering price -a direct listing means the company is not making any new cash from going public.-
Indeed, the company didn’t catch fire with investors in the way collaboration companies like Zoom Communications have during the COVID pandemic.
Slack has reportedly rebuffed previous acquisition overtures from Google, Microsoft and Amazon. But this acquisition with Salesforce can change the game and is one of the most strategic acquisition of the Software industry of all time: This combination will enable Slack to expand its portfolio and to fulfill it’s original mission.
" 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."
Slack: A Record Customer Growth as remote work surged during the pandemic
In Canada, the pandemic has led some companies to consider adopting this new form of work as a permanent measure. Businesses around the world were forced to shift operations remote and demand on communication software surged.
Slack was quick to seize the opportunities of the pandemic and gained 12,000 net new paid customers during Q1 , including 963 paid customers with greater than $100,000 in annual recurring revenue.
Slack serves leading organizations in every industry around the world, from the fastest growing startups to Fortune 500 companies. Among its portfolio, one can notice giant companies such as Starbucks, Target and TD Ameritrade, along with leading academic institutions, non-profits, and governments in more than 150 countries.
One of the new Slack customers is tech giant Amazon, which will now have all of its employees to use Slack’s workplace collaboration tools. Slack is also updating its video-calling feature to take advantage of an Amazon web service called Chime as part of the companies’ partnership.
Salesforce expects to fund the cash portion of the Slack deal through a combination of new debt and cash on its balance sheet. The company announced it secured $10 billion in bridge loans from Citigroup, Bank of America and JPMorgan Chase Bank. The transaction is anticipated to close in the second quarter of Salesforce’s fiscal year 2022, subject to these parameters:the approval by the Slack stockholders, the receipt of required regulatory approvals and other customary closing conditions.
About Slack
Slack has transformed business communication. It’s the leading channel-based messaging platform, used by millions to align their teams, unify their systems, and drive their businesses forward. Only Slack offers a secure, enterprise-grade environment that can scale with the largest companies in the world. It is a new layer of the business technology stack where people can work together more effectively, connect all their other software tools and services, and find the information they need to do their best work. Slack is where work happens.
Slack and the Slack logo are trademarks of Slack Technologies, Inc. or its subsidiaries in the U.S. and/or other countries. Other names and brands may be claimed as the property of others.
Credit Photo: Courtesy of Slack Technologies
Image Source: M.G. Siegler via Twitter
