Salesforce catching up with Slack deal

By Tom Lemmon | 8 December 2020

Salesforce’s decision to acquire Slack for $27.7bn can be read as an attempt to try to gain ground on competitors, according to Graham Norton-Standen, executive chairman at High Impact Office, a tech consultancy.

“Salesforce has sat back on its laurels, just as it did with classic for many years… Salesforce has left itself in a position whereby taking the finger off the pulse has placed a great deal of pressure on an already aging stack solution,” he said in an email.

“It was obvious that with the increasing pressure from solutions like [Microsoft’s] Dynamics CRM, which has a wonderful stack of technologies underlying it, along with Teams, Salesforce had little option other than to look for a Teams contender”.

The joint announcement by Salesforce and Slack states a goal of creating “the most extensive open ecosystem of apps and workflows for business and empower millions of developers to build the next generation of apps”. Salesforce added that Slack will become “deeply integrated” into their cloud offerings.

However, Angela Ashenden, principal analyst, workplace transformation at market research firm CCS Insight was optimistic that the deal would provide the “boost” that Salesforce had been looking for.

“The Slack team has a good understanding of how to drive adoption and business change within customers, which would augment Salesforce's customer success organisation. Slack Connect enables B2B collaboration and is gearing up to allow the creation of a B2B business network, which would be another great opportunity for Salesforce,” she said in an email.

The acquisition is the eighth largest M&A deal in tech history, according to Forbes and while Norton-Standen said this represented a good deal for Slack, it was also evidence that Salesforce was merely “chasing its tail” as it failed to keep up with Microsoft’s Teams solution.

“I would suggest that Salesforce has played into the hands of Microsoft and could be yet another victim of the pace Microsoft evolves at.

“Teams is an extremely mature and well-integrated solution, with many partners developing apps and it does seem to be a great deal more focused development on that platform,” he added.

Chair and CEO of Salesforce, Marc Benioff said in the announcement last week that the deal represented a “match made in heaven” while Slack CEO and co-founder, Stewart Butterfield called the opportunity to work with Salesforce “massive”. Ashenden believes the two companies could complement one another well. 

“Slack's integration and app story would also play well with Salesforce's strategy. The potential of Slack Connect and creating a B2B collaboration network would also jive well with Salesforce's business enablement story,” she added.

Salesforce go all-in on remote working

Last week’s announcement also reflects a growing belief that remote working is here to stay, according to Ashenden.
When asked if Salesforce were gambling on remote working becoming a permanent fixture in the workplace, Ashenden said: “Yes I think so, and it’s a safe bet based on everything our research is telling us. But this isn’t just Salesforce jumping on the bandwagon – if they were going to do that, I think they’d be more likely to enter the video conferencing space.”

However, Norton-Standen described the move to more digital communication methods as an inevitable shift, rather than a gamble, with coronavirus rebooting the use of technology on a global scale.

“Whether it be full office, part time office or work from home in the future, communications, collaboration and team meetings will certainly change and become the new normal,” he added.

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