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Salesforce Acquires Slack For Almost $28B, Largest M&A Ever For The Company: 5 Things You Need To Know

Salesforce Acquires Slack For Almost $28B, Largest M&A Ever For The Company: 5 Things You Need To Know

Salesforce Slack
Salesforce Acquires Slack For Almost $28B, Largest M&A Ever For The Company: 5 Things You Need To Know

Cloud-based software company Salesforce has acquired the business communication platform Slack for $27.7 billion in one of the largest deals ever for the software industry.

Salesforce CEO Marc Benioff has been on a multi-year buying spree, transforming the software company into one of the most valuable in the world — more so than Oracle, SAP, IBM, Cisco and Intel, CNBC reported.

Slack has become indispensable for many businesses operating remotely during the coronavirus pandemic, Washington Post reported. A cash infusion could help Slack expand and compete with rivals such as Microsoft Teams. 

Here are five things you need to know about the acquisition.

What is Slack?

Slack is a popular but unprofitable brand that’s well known outside its industry. Companies can use Slack to make public or private chat groups for teams and departments and it works with popular workplace tools such as Google Docs or Trello. The workplace-collaboration software is mostly used as an alternative to email. Instead of a full email inbox, users get chat messages instantly on Slack via desktop app or phone. 

What’s in it for Salesforce?

By acquiring Slack and its 130,000+ paid customers, Salesforce grows its portfolio of enterprise apps and fills out its broader software suite as it seeks new areas of growth, CNBC reported.

Salesforce says it plans to make Slack its new interface and integrate Slack with its Salesforce Customer 360 software, which collects companies’ customer information in one place, Washington Post reported.

Buying Slack gives Salesforce a tool to fight rivals. Microsoft has been pushing its Teams product heavily during the pandemic. Google has pushed its collaboration and video tools, and Zoom has risen as a video-only option.

Salesforce has wanted to expand into the collaboration space for years (and made mistakes trying). “Slack provides a clear channel into the space,” according to Bernstein analysts.

Not too many larger acquisitions

The largest software company acquisition was IBM’s $34 billion purchase of Red Hat in 2018. Microsoft’s paid $27 billion for LinkedIn in 2016. The London Stock Exchange agreed in 2019 to buy data provider Refinitiv for $27 billion.

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Other huge Salesforce acquisitions

Salesforce paid $15.3 billion in 2019 to acquire data visualization company Tableau and $6.5 billion in 2018 for MuleSoft, which makes back-end software that connects data stored in disparate places.

Why it’s important

Silicon Valley is betting that remote work and the software that powers it are here to stay, Washington Post reported. Despite a coronavirus vaccine expected soon, many companies have said they plan to make some remote-work changes permanent. Twitter employees can choose to work remotely indefinitely. Facebook has said up to half its workforce could be remote in 10 years.

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