<div>The #1 CRM platform, Salesforce, agreed to purchase Slack for a $27.4B deal marking it the biggest acquisition in the company's history.Marc Bennett, co-founder and CEO, wasn't shy about his feelings on the deal. "This a match made in heaven. Together, Salesforce and Slack will shape enterprise software's future and transform how everyone works in the all-digital, work-from-anywhere world. Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it. I'm thrilled to welcome Slack to the Salesforce Ohana once the transaction closes.""Salesforce started the cloud revolution, and two decades later, we are still into all the possibilities it offers to transform the way we work. The opportunity we see together is massive," said Slack CEO Stewart Butterfield. "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. Personally, I think this is the most strategic combination in the history of software, and I can't wait to get going."Salesforce, which started as a cloud-based software company for sales reps, is transforming into a software company forced to be reckoned with. Other recent significant purchases include Tableau, a data visualization company, for $15.9 billion in 2019, and Mulesoft, whose software connects data in different places, for $6.5 billion.Salesforce will purchase Slack through a combination of cash and stock. The deal includes a purchase price of $26.79 a share and .0776 shares of Salesforce. This comes to around $45.86 a share for the stockholders.This deal allows Salesforce to compete with Microsoft in the enterprise social arena, with Slack squaring off against Teams. This is something Slack couldn't accomplish on its own. The two behemoths are battling across other areas as well.When Salesforce purchased Tableau that was a direct challenge to Microsoft's Power BI, both companies competed for LinkedIn, which Microsoft eventually won out. Salesforce even tried to compete with Microsoft Office with the acquisition of Quip. That didn't turn out how they hoped for it. <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">What does it mean for Slack?</h2>Slack has struggled to keep up with the intense competition in the office chat and productivity platforms. The company has been losing value ever since going public in April 2019 and has failed to turn a profit in the last three quarters. The company did not have a clear path to profitability and was ripe for the taking.Slack gets to reignite its slow growth under a company with a global network of the sales staff. The 130,000 paid customers are sure to increase given all the resources now at its disposal.Rishi Jaluria, an analyst at D.A. Davidson, was surprised at Slack being unable to capitalize on the pandemic given folks working remotely. "We have been surprised by the limited success Slack has seen from the pandemic and the rise of remote work. Microsoft Teams has been able to capitalize on the opportunity presented by the pandemic better than Slack, in our view, and this rapid growth in adoption has hurt Slack."Slack will now have a tremendous asset on its side to compete against the likes of Teams and others in the messaging space. The question remains whether the sale of it to Salesforce could be a profitable venture. Or does Microsoft and others continue to dominate Slack in the messaging business?Let's take a look at how it all began for Slack. <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">History of Slack</h2>Slack was founded by Stewart Butterfield, a serial entrepreneur, in 2009 in Vancouver, British Columbia, Canada. It started as an internal tool for the development of Glitch.Glitch started as a web-based massively multiplayer online game designed with non-violent, collaborative gameplay. Butterfield got $% million in funding for this project, which ultimately failed.When Glitch closed, the company launched the Slack real-time collaboration app and platform, raising $17 million from Accel Partners, Andreessen Horowitz and Social Capital.After Slack was launched in August 2014, the company renamed itself Slack Technologies. The name Slack is actually an acronym meaning "Searchable Log of All Conversation and Knowledge".The company raised $120 million in October 2014 in venture capital money with a $1.2 billion valuation led by Kleiner Perkins and GV. Slack went on to purchase Screenhero, a voice, video, and screen sharing company in January 2015.Over the next few years, Slack managed to raise hundreds of millions of dollars from other investors such as Thrive Capital, GGV, and Comcast ventures. This led to the company's initial public offering in the first half of 2019.Not many businesses could grow and raise money by leaps and bounds as they seemed to accomplish. So, how did they do it? <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">How Slack Scaled?</h2>Slack made customer feedback on the main focus when it decided to roll out the application to users."We begged and cajoled our friends at other companies to try it out and give us feedback. The pattern was to share Slack with progressively larger groups. We would say, 'Oh, that great idea isn't so great after all.' We amplified the feedback we got at each stage by adding more teams," Butterfield says.The folks at Slack realized that their product functioned very differently as team size increased. Armed with this information, they gathered the data from the larger teams and went to work improving the product.When they were done making the necessary changes began the process all over again, getting customer feedback. After all of the kinks were worked out they decided to share their product with a much wider audience.They announced a preview release in August 2013, just a mere seven months after they started. Slack utilized a press blitz to get the word out about their product. They asked folks to request an invitation to try out their offering and see what they thought.On the first day of the release, 8,000 people sent a request to try out the application, with that number growing to 15,000 in the first two weeks. Now they were off and running.Stewart Butterfield attributes most of the success to people spreading word about Slack to their friends and the Internet. He estimates that 20% of how they grew could be traced back to the original release, but the remainder is people posting about that article. "The other 80% is people posting about that article. I almost never go to news sites — it's overwhelming how much content is out there. But I will pay attention to what my friends are picking up and sharing." <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">The Future of Salesforce</h2>The future of Salesforce looks bright and promising. Given Slack's acquisition, they can know compete and keep up with the likes of Microsoft and others. The purchase of Slack provides them another tool to expand their business.Salesforce plans to fully integrate Slack into each of its cloud services and use it as the new interface for its Salesforce Customer 360 platform. This will make communication easier for companies to interact with their employees, customers, and external partners."This isn't just about the future of collaboration. This is a new 'operating system' for how knowledge workers will interact in the future, connecting the front office, back office, and customers in a single platform," says Aaron Levie, co-founder and CEO at content management company Box.Salesforce hopes to transform from a cloud computing solution to a primary software platform of choice, powering all of a company's modern infrastructure and operational needs.The big question remains whether Salesforce can improve and gain ground on Microsoft Teams the way Slack couldn't on its own? Can they improve on the just $834 million sales Slack had in the past 12 months?Based on the other two major acquisitions Salesforce has had in the past couple of years (Mulesoft, Tableau), they should be just fine. Both of those assets continue to grow since SalesForce purchased them.Given the assets and past success, Salesforce has a bright future and will be a major player in the future of work for years.</div>

Thomas Davis

Tech News

Salesforce Buys Slack in a $27.4B Deal

COVID-19 changed the digital landscape for companies like no technology has ever. The digital acceleration accomplished in a few mere months what would normally take a couple of years.

Digital Acceleration In The Time Of Coronavirus

<div>We all knew technology would be a disruptive force in our lives. But we didn't expect it to happen this fast. Businesses have had to adjust to the work landscape that happened overnight, thanks to the coronavirus. Businesses that weren't prepared for the digital age received a wake-up call. This left most of them scrambling and trying to figure out how to adjust on the fly. Problems they never had before came out of nowhere and had to be dealt with like virtual meetings, migrating operations, employee productivity and mental health, infrastructure issues, etc.Those companies that had the foresight to begin planning ahead of time were much better prepared. They were well-positioned to leapfrog their competitors who weren't prepared. This does not mean that they could have seen this coming., but they will be in a more advantageous position to come out on the other side of this pandemic, stronger. <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Companies Foresight</h3>For instance, RXR Reality was one of those companies that well-positioned themselves ahead of time. The New York City-based commercial and residential real estate developer began investing in digital capabilities that set it apart from its competition."Historically, real estate has been a very transactional business. We felt that by leveraging our digital skills, we could create a unique and personalized experience for our customers similar to what they're used to in other aspects of their lives", explains Scott Rechler, CEO of RXR.Before the global pandemic hit, RXR had established a digital lab. This included over 100 data scientists, designers, and engineers working across the business to complete digital initiatives.Their company was so far ahead with creating an app that could provide services without human intervention. This included enabling move scheduling, deliveries, dog walking, rent payments on the residential side, and real-time analytics on heating, cooling, and floor space optimization for tenants on the commercial side.Suddenly the need for social distancing and contactless interactions was necessary for the tenants of the buildings. This allowed RXR to pivot quickly and seamlessly to meet this need.RXR Reality received 2020 Digie Award – Best COVID Tech – for their preparedness.Majid Al Futtaim Retail, a Dubai-based conglomerate that runs retail food and grocery stores in the Middle East, is another example of an organization ahead of time.The company began building its digital presence long before COVID-19 hit. They began assembling their online presence in 2015 to operate alongside their 315 brick-and-mortar stores across 16 countries. But progress was slow since they didn't see the need for any urgency.Then the pandemic hit, and the company was forced to speed things up. "The pandemic pushed us to accelerate our digital transformation. We are implementing things in the coming 18 months that we originally wanted to achieve in five years," said Hani Weiss, CEO of Majid Al Futtaim Retail.This sudden increase in demand meant Majid Al Futtaim had to move fast. They quickly converted some physical stores to fulfillment centers, but the stores proved to be too small. So, logistics managers swiftly arranged to have a 54,000 -square-foot fulfillment center tent erected and operational in five weeks. The centers were complete with frozen and chilled food rooms, making it easier to stock more than 8,000 items ready to ship.Hani Weiss credits initiatives such as Click and Collect with its redesigned app to meet the increased demand. The app made it easier for customers to use and launched contactless payment options such as Mobile Scan and Go in its stores. This allowed customers to scan items and pay with their smartphones. These tools allowed the company to launch an online marketplace with 420,000 new products from other retailers whose stores were closed during the lockdown."No matter how our customers want to shop, we can be there for them," Weiss says. "We developed this agility through the pandemic, and I want to keep it as we go forward." <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Where Do Companies Go From Here?</h3>COVID-19 changed the digital landscape for companies like no technology has ever. It transformed the way we work forever, and companies have no choice but to adjust quickly. The digital acceleration accomplished in a few months what would normally take a couple of years.This new environment forced companies to adopt new strategies and plans for the future. This will would be no easy task, especially if they weren't prepared.Organizations have to change immediately or risk being left behind and having their business disappear or become irrelevant. They need to make better informed and faster decisions, focusing on automation, real-time risk assessment and mitigation, continuous value delivery, and agile strategy.Functional leaders should begin thinking about speed and efficiency if they haven't started already. Cut out anything that drags or slows down processes, procedures, or customer interaction.When we look at the future of work, there must be a few factors that need to be addressed. Things such as intellectual, social, and human capital have to be considered, and decisions have to be made to best move forward.Companies must leverage individual and group decision-making that includes different stakeholders. These would be technology folks, analytics people, subject matter experts, and creative out-of-the-box thinkers.The use of technology will be a crucial piece in bringing people and ideas together to work as one. Various communication methods such as social media, apps, chatbots, and video conferencing will be front and center for your business to be successful.Lastly, businesses need to understand how best to communicate with vendors and external parties, and customers to survive in this new landscape. <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Conclusion</h3>The coronavirus has sped up digital acceleration like nothing any of us has seen before. The business was headed in that direction, albeit slowly. The way people work and shop has changed forever. Tons of organizations shut down brick-and-mortar stores, with a number of them to never return.These went from a physically interactive environment to a more technically intensive atmosphere. Many stores couldn't pivot this way and had to deal with the harsh, grim reality. But those that took advantage seized an enormous opportunity to put them on the road to success.Digital acceleration caused a huge interruption in our lives, but we will all be better for it in the long run.</div>

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