Salesforce in talks to buy Slack

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Reports this week suggest that cloud-based software company Salesforce Inc is in talks to acquire workplace messaging app Slack Technologies Inc as it seeks to expand its offerings to businesses, people familiar with the discussions said on Wednesday.

The Slack app has been installed about 12.6 million times so far this year, up approximately 50% from the same period in 2019, according to analytics firm Sensor Tower. However, in recent months, the economic fallout of the virus outbreak has forced Slack to give discount and payment concessions to many of its customers who have had to make cost cuts.

As a result, the platform has struggled to fully capitalise on the switch to remote working. An acquisition by Salesforce would be a logical extension of its enterprise offerings.

As enterprise platforms such as Microsoft Teams continue to introduce new features to gain market share, a potential acquisition would see a significant investment in the business – plus, deepen Salesforce’s clasps within businesses. For some time Salesforce has been seeking to grow its share within the cloud market evidenced through acquisitions such as GroupSwim (which it turned into Chatter) and Quip, a mobile-first word processor positioned as a competitor to Microsoft’s Office suite.

Rishi Jaluria, an analyst at research firm DA Davidson and Co said: “I think Microsoft Teams has been able to capitalise on the opportunity better than Slack, partly because they give it away for free as a bundle. Now Slack realises that they might be able to get greater penetration as part of a larger company.”

Slack’s billing growth, a key indicator of future revenue, slowed in the three months to the end of July. Salesforce meanwhile has been thriving financially during the pandemic. With around 80% of simplycommunicate readers using, or about to roll-out apps within Microsoft 365 suite, if this acquisition is confirmed, may well be an interesting race to follow.

Marc Wright, Founder of simplycommunicate considers this move to be a bigger in the world of enterprise comms.

“Salesforce has long looked to expand into the area of the digital workplace. Chatter was an early social channel, but it did not take on beyond the sales team as it was too clunky. They also looked at creating their enterprise social network but that never really took off. The acquisition of Slack (if it goes ahead) is a game-changer as the channel is already widely used and it has a cracking user experience. But with around 80% of our readers using, or about to roll-out O365 apps, Microsoft are clearly still ahead in the game when it comes to internal Communicatons and the digital workplace.”

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