Last week, Salesforce bought Slack for $27.7 billion. Slack’s share price has soared by 38% since the deal was announced, while Salesforce’s has fallen by more than 4%.
Why would Salesforce, the giant of CRM, make such a bad deal?
And what kind of treasure is Slack, Salesforce’s chosen child?
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1. Slack, the Chosen One, peaked as an IPO
What many people may not know is that Slack, which has been so successful in the software industry, turned out to be a failed gaming company, Tiny Speck, founded by Butterfield.
A careless tree will have shade. While working on Glitch, Butterfield and his team accidentally created software that allowed users to communicate and share files, which is now Known as Slack.
Although Slack was an unexpected transformation, its early growth was a myth.
In its early days, Internet giants like Salesforce and Google chased it, and more than 30 teams tried to sign up to Slack.
At the beginning of 2017, Slack, less than a year old, was making more than $100m in annual revenue, a staggering figure.
In 2019, Slack went the high-risk route of going public and peaking, putting pressure on Microsoft’s Teams.
Salesforce, which wants to make a big push into the Collaborative Cloud, is eager to buy Slack, which is so good.
2. Linkedin teamed up with Microsoft to kill Slack
A few years ago, Both Microsoft and Bev were interested in LinkedIn, a workplace social network, but in 2016, LinkedIn was acquired by Microsoft. Salesforce failed to capture linkedin’s attention, so it turned to Slack for a piece of enterprise collaboration.
When SoftBank, once Slack’s biggest investor, sold off its entire stake in September, Salesforce pulled out, fearful of losing its treasure again.
Slack could give Salesforce more leverage as it goes head-to-head with Microsoft.
3. “Buy, buy, Buy”
Salesforce became one of the world’s most valuable software companies by “buying, buying, buying” its way to becoming a SaaS powerhouse.
Quip, acquired in 2016, provides the company with a suite of productivity software for mobile and Web collaboration.
In 2018, MuleSoft was acquired for $6.5 billion to help the company connect its products to cloud applications.
In 2019, Salesforce bought Tableau for $15.3 billion, entering the data visualization market and taking on Microsoft (MSFT.us) Power BI.
4. Is Salesforce still hiring?
With each acquisition, Salesforce has become increasingly competitive with Microsoft. Salesforce does not have the upper hand in this game, and it will take a lot of good people to make Slack the darling of millions of workers.
Salesforce expects tens of thousands of new jobs to be created between 2019 and 2024, according to IDC’s 2019 white paper.
I have to say the money smells good, too
According to Salesforce’s website, both social and school recruitment are booming. If some students can get the position of INTERN, they may be able to join Salesforce after graduation. If you are looking for a job, you can have a good time