The company was originally founded in 2009 as an online gaming company call Tiny Speck. Slack investors will receive $26.78 for each company share as well as 0.0776 share of Salesforce -- representing a 55% premium to Slack's price on Nov. 24, the day before reports about deal . Were not in a good M&A environment, he said, referring to mergers and acquisitions. The CRM giant said Tuesday after market close that it would acquire Slack ( WORK) in a cash and stock deal valuing the workplace. Cofounder Marc Benioff is taking increasing control over the company alienating his top lieutenants and dialing up pressure on employees. This is more or less saying: We cant compete with Microsoft Teams anymore. All Rights Reserved. Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce's common stock on 30th November 2020. Unlike so many cloud companies, namely Zoom and RingCentral, Slack has not seen a COVID-induced revenue boost this year and I'm sure that has contributed to its agreeing to be acquired. Slack's vision is great but it needs a use case, which Salesforce delivers in the B2B sales context. Salesforce's Marc Benioff. Salesforce is now in talks about buying Slack, setting up a showdown with Microsoft that could shape the way software is used by many of the world's office workers. So, why did Salesforce buy Slack? The deal is expected to be about half cash and half stock, the. Taylor was credited as the architect of Salesforce's 2020 deal to buy Slack for $27.7 billion, Salesforce's biggest acquisition ever." Opinions expressed by Forbes Contributors are their own. Salesforce said it planned to incorporate Slacks communication software into every aspect of its cloud software offerings. Ron reports that Slack CEO Stewart Butterfield, who joined Salesforce when the company acquired Slack in 2020, . Let's take a look at the largest Salesforce acquisitions of all time. Also remember enterprise software market still in early stages for a tremendous growth. To this point, we believe the company will have significant difficulty further penetrating the core enterprise market and Microsoft installed base given the significant competitive offering from Microsoft's Teams product that could slow growth going forward quicker than the Street is anticipating, despite the COVID driven tailwinds, warned Wedbush tech analyst Dan Ives. Speaking of salesforce, the cloud software giant made it official this afternoon: it has agreed to acquire smaller rival Slack WORK for $27.7 billion in cash and stock ($26.79 per share, at 0.0776 . Rishi Jaluria, an analyst at D.A. Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Get this delivered to your inbox, and more info about our products and services. Under the terms of the agreement,. Marc Benioff, the chief executive of Salesforce. Slacks revenue will be a tiny drop in the bucket for Salesforce. In August, Mr. Benioff told analysts that Salesforce was not seeking acquisitions, implying that valuations were too high. On the day the S&P 500 bottomed, Salesforce (CRM-1.35%) closed at $7.72 per share. By acquiring Slack, a business chat service with over 130,000 paid customers, Salesforce is bolstering its portfolio of enterprise applications and filling out its broader software suite as it seeks new areas of growth. Now perhaps Salesforce will be more complete with Slack, covering organisations' front office, back office, everything they ask for. In one of the biggest tech mergers, cloud computing giant Salesforce has acquired workplace chat app Slack for $27.7 billion. SAN FRANCISCO Salesforce said on Tuesday that it would buy the workplace software company Slack for $27.7 billion in cash and stock, the latest in a wave of deals as the coronavirus. "Stewart [Slack CEO Stewart Butterfield] and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it, said Marc Benioff, Salesforce chairman and CEO. So, why did Salesforce acquire Slack and more importantly, why did Slack decide to sell to Salesforce? Arvind Krishna is a close friend of mine and he believes that bringing Salesforce and Slack together is key for IBM to become even more connected, more productive and more innovative. Now we know. In the biggest tech deal of the year so far, Salesforce announced that it plans to buy Slack Technologies provider of the popular workplace-messaging . Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Mr. Butterfield will continue leading Slack, which will become an operating unit of Salesforce. It was created by Stewart Butterfield, famous in the tech world for starting photo-sharing site Flickr and selling it to Yahoo. Salesforces board should look harder at finding a successor for Benioff. This year, Slacks shares were up roughly 25 percent, though they remained below the level of the companys public market debut, before news of a deal with Salesforce broke last week. Salesforce (NYSE: CRM) has confirmed the rumors that started swirling last week. The companies also go head-to-head in productivity software, though Microsoft's Office suite controls the market along with Google. Salesforce ( CRM) is getting some big work done before year-end. Slack is projected to grow 39% this fiscal year, which ends Jan. 31, to $876.3 million, according to analysts surveyed by Refinitiv. Find out more about how we use your information in our Privacy Policy and Cookie Policy and change your choices at any time by visiting Your Privacy Controls. While everyone circled around the Slack news, most people completely missed Salesforce's announcement that same day that it planned to acquire Acumen Solutions for $570M. Salesforce's annualized revenue topped $20 billion in the fiscal second quarter, with growth of 29%. A deal could . Selling your company for 27 Billion is a win in the books I read. In February, Salesforce paid $1.3 billion for Vlocity, a mobile software provider. From their late May high for the year to just before the deal speculation, Slack shares were down 25%. The deal is the biggest bet among a recent spate of acquisitions made by tech companies to capitalize on the shift to remote work. Marc Benioff, boss of the business software giant . Data is a real-time snapshot *Data is delayed at least 15 minutes. CRM is a Strong Buy, based on 20 Buy and 5 Hold . How so? Layoffs at some of its customers have hurt its business, the company said. wrote in a report, We have been surprised by the limited success Slack has seen from the pandemic and the rise of remote work. Slacks slower growth is due in part to the perception that it has not positioned itself well for WFHs potential tailwind the way Zoom and Shopify have. Teams, Microsofts collaboration product, reported 115 million daily users in October, up 50 percent from April. Adobe said last month that it planned to acquire the work force management software company Workfront for $1.5 billion. Under Mr. Benioff, Salesforce has bought at least 60 companies, including 27 in the last five years, according to S&P Capital IQ. Salesforce just picked up Slack for a cool $27.7 billion based on the closing price of Salesforce's common stock on November 30, 2020. Slack has said it has about 12 million daily active users, and Salesforce on Tuesday said Slack now has more than 142,000 paying customers. San Ramon, Calif.. - Business software pioneer Salesforce.com is buying work-chatting service Slack for $27.7 billion in a deal aimed at giving the two companies a better shot at competing . The company announced on Tuesday that it's buying chat software developer Slack for over $27 billion. Reported EPS is $1.4, expectations were $1.22. By clicking "Reject all" you reject all non-essential cookies and similar technologies, but Yahoo will continue to use essential cookies and similar technologies. Slack has a market value of about $17 billion. In July, Slack filed a complaint against Microsoft with the European Commission, claiming Microsoft had unfairly bundled Teams with its suite of Microsoft Office work products. it would buy the workplace software company Slack, it planned to acquire the work force management software company Workfront. Its valuation was about $19.5 billion when it went public last year, but its shares later sank. At the data layer, Mulesoft and Customer 360 enable enterprises to unify data within Salesforce and make it available to other layers of the stack. Benioff and Microsoft CEO Satya Nadella were business friends who turned into rivals, As Bloomberg reported, Benioff was one of the first rivals Satya Nadella forged closer ties with when he took over as Microsoft CEO in 2014, but the executives relationship fractured in 2016 when Microsoft acquired LinkedIn. Slack listed its shares publicly on the NYSE this week with a reference price of $26, which would put it at a value of around $15.7 billion. Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce's common stock on November 30, 2020. Slack changes everything and makes Salesforce a whole new type of company. Salesforce.com Inc. agreed to buy messaging company Slack Technologies Inc. in a $27.7 billion deal that shows how the biggest players in cloud computing are racing to add muscle amid the. Last year, it bought Tableau, a data analytics provider, for $15.3 billion; in 2018, it bought MuleSoft, a data integration company, for $6.5 billion; and in 2016, it bought Demandware, an e-commerce software maker, for $2.8 billion. Erin Griffith reported from San Francisco, and Lauren Hirsch from New York. Operator: Good afternoon . So folks are Keeping Salesforce of course, they are. Slack will combine with Salesforce Customer 360, which connects all apps in the Salesforce suite, and Salesforce says it will completely change how users communicate and work with their clients. Slack has been one of Silicon Valley's legendary stories over the past decade, orchestrating one of the wildest pivots the industry has ever seen. Davidson, in a report last week. Salesforce, with its vast enterprise installed base, could use its market reach to promote Slack to the world's largest companies in the event the reported acquisition talks lead a deal.. As part of Salesforce, Slack will be positioned to accelerate and extend its mission to make work life simpler, more pleasant, and more productive. But they aren't adding new products or upsells at anything close to the rate earlier in the year. Salesforce to Acquire Slack for $27.7 Billion, https://www.nytimes.com/2020/12/01/technology/salesforce-slack-deal.html. Salesforce projected that its revenue could reach as much as $25.6 billion in the next fiscal year, almost double the company's performance in the fiscal year that ended about two years ago.. The Slack buy positions Salesforce against Team, a much stronger Microsoft collaboration product. Salesforce could help easily scale up Slack to more high-paying corporate customers in a major challenge to the momentum at Teams. CRM Slack has faced competitive pressure from Microsoft. SaleForce might have made an offer in the $35 range, and after much negotiation SalesForce and Slack's board of directors agreed on the price of around $44 per share. Slack has not provided an update on the 12 million daily users it reported a year ago. The company announced on Tuesday that it's buying chat software developer Slack for over $27 billion. Business software pioneer Salesforce.com is buying work-chatting service Slack for $27.7bn in a deal aimed at giving the two companies a better shot at competing against longtime industry. Andreessen Horowitz, Accel Partners and Social Capital were among Tiny Speck's early backers. How? It is, as the mighty Anshu Sharma says, the Bloomberg terminal of developers, sales people and marketers. It caught many off guard . Whereas Zooms third quarter revenues grew 365% to $777 million, Slacks growth lagged considerably revenues rose 39% to nearly $235 million. According to the Wall Street Journal, thats a 54% premium to its unaffected price [since the deal was reported before which Slack traded at $30, Slack stock popped 38%] and represents a multiple of about 26 times forward sales., By acquiring Slacks over 130,000 paid customers, Salesforce adds to its enterprise applications portfolio in its competition with Microsoft. The tie-up between the two is hardly a surprise. Watch Yahoo Finances live programming on Verizon FIOS channel 604, Apple TV, Amazon Fire TV, Roku, Samsung TV, Pluto TV, and YouTube. Reportedly, the integration with Slack improved Salesforce's Service Cloud case close rate by 26%. 3 min read. If you plunked down $1,000 at that price, you'd . Slack is projected to grow 39% to $876.3 million in the fiscal year ending January 31, according to analysts surveyed by Refinitiv. Salesforce CEO, Marc Benioff sounds exuberant about this acquisition. Its unclear when Slack will turn a profit, which is something that has weighed on the minds of Wall Street in recent months. They shut down Glitch and focused on chat, opening it up to customers in early 2014. "This deal will be a major shot across the bow at Microsoft," wrote Dan Ives, an analyst at Wedbush, in a report on Monday. Others soon followed, most notably Slack CEO Stewart Butterfield . Without Slack, there would have been no Teams. But to watchers of the Slack story in 2020, its one that has left bullish investors wanting for more amid the rampant shift to work from home during COVID-19. On December 1, Salesforce announced it would pay $27.7 billion mostly in cash to acquire Slack. Jemal Countess / Stringer. Marc Benioff, the chief executive of Salesforce, was effusive about the combination, calling it a match made in heaven. In a conference call, he said that Stewart Butterfield, Slacks chief executive, and Bret Taylor, Salesforces president, had presented him with the deal. Through a combination. Salesforce's $27.7 billion acquisition of Slack closed after passing DOJ scrutiny last week. That comes to about $45.86 a share. At the same time, Slack has faced increasing competitive pressure from Microsoft. The company has its headquarters at Salesforce Tower in San Francisco. Massive respect to Stewart Butterfield, and thanks for making liberal arts degrees cool again. Salesforce is making the biggest acquisition in its 21-year history. Photo: Thomas Trutschel/Photothek/Getty Images. But over the course of working on it, Butterfield's team built a product to help them communicate with one another and to share files. . Select 'Manage settings' to manage your choices. Joining forces gives both Slack and Salesforce a much stronger proposition. Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world. Acumen, one of Salesforce's top 10 global partners which has grown to more than 1,000 employees over the last 22 years, is one of few remaining independent cloud . On the company's earnings call Tuesday, Benioff said that Salesforce believed it could help Slack reach the next critical stage of revenue growth. Shareholders will get $26.79 in cash and 0.0776 shares of Salesforce stock in exchange for each share of Slack, according to Tuesdays deal announcement. This deal is the strongest signal yet that Salesforce stock has jumped the shark time to take your profits. "They say time is the one thing you can't buy, but in fact, time is the . IBM has built their entire Customer 360 on Salesforce and now has more than 530,000 customers, 380,000 employees and 50,000 partners using our platform. Salesforce has agreed to acquire Slack for $27.7 billion. data, application, and engagement). Google, Oracle, Amazon, and Microsoft awarded $9 billion Pentagon cloud deals As Apple's App Store expands price points options, RevenueCat rolls out A/B price testing tools Slack became a publicly traded company last year. Indeed Microsoft has done a better job at turning WFH into a tailwind by adding videoconferencing to Teams and heavily promoting the collaboration service, according to the Journal. Sign up for free newsletters and get more CNBC delivered to your inbox. On Tuesday, Mr. Butterfield tweeted that Slack would remain an independent and open platform and said its mission had not changed. Stewart Butterfield, Slacks chief executive, at the companys headquarters in 2017. We want to hear from you. The shares debuted on the New York Stock Exchange in June 2019, through a direct listing. Salesforce (NYSE: CRM), the global leader in CRM, today announced it has completed its acquisition of Slack Technologies, Inc. "We couldn't be more excited to have Slack as part of the Salesforce family, combining the #1 CRM and the trailblazing digital platform for the work anywhere world," said Marc Benioff, Chair and CEO of Salesforce. According to the Wall Street Journal, that's . On Tuesday, Slack reported that revenue grew 39 percent in the three months ending with October. Personally, I believe this is the most strategic combination in the history of software, and I cant wait to get going.. This is our ultimate vision.. The deal, which values Slack at $27.7 billion on revenues of $833 million over the past year, has largely been . For Marc Benioff, chief . Meantime, despite impressive growth this year in paid customers amidst the pandemic notably among large corporations and a host of new innovations to retain existing clients, Slack still expects to post a net loss this fiscal year. The only real question would be how much Salesforce was willing to spend. Teams now has more than 115 million users while Slack has a fraction of that, despite it having the edge in the minds of most in terms of user interface. Salesforce (CRM) is getting some big work done before year-end. Salesforce's deal to buy Slack is expected to be announced Tuesday after markets close, sources told CNBC's David Faber. Along with sharing its third-quarter 2021 results, Salesforce announced that it is buying Slack (NYSE: WORK). The company has loosened contract structures and extended credits to help them out. Mr. Taylor said the pandemic had fundamentally shifted consumer behavior and the way people work. Davidson. We, TechCrunch, are part of the Yahoo family of brands. While the company said in September that revenue rose 49 percent to $216 million in the three months ending in July and that the pandemic had created a significant increase in demand and usage of Slack, it also said it did not expect that rise to continue. Salesforce Is Buying Slack for $27.7 Billion. With tough competition. Marc Benioff, founder, chairman and CEO of enterprise cloud computing company Salesforce. Through a combination of cash and stock, Salesforce is purchasing Slack for $26.79 a share and .0776 shares of Salesforce, according to a statement. Indeed, it seems to me that this deal is not about logic but about Benioffs Microsoft envy. Other firms focused on workplace collaboration products, including Airtable, Asana, Box, DocuSign, Dropbox and Smartsheet, may also be potential targets as highly valued software companies look to roll up the fragmented market for collaboration tools. If Salesforces revenues for the year grow 22%, it will end 2020 with about $20.8 billion in revenue making Slack a mere 4.2% of the total. The CRM giant said Tuesday after market close that it would acquire Slack (WORK) in a cash and stock deal valuing the workplace communications service at $27.7 billion. As a subscriber, you have 10 gift articles to give each month. Slacks trajectory reminded him of Salesforces, Mr. Benioff said, and he marveled at the possibilities of combining the two companies data and tools. First up, this makes a lot more sense than SAP buying Qualtrics did, but then that is a low threshold. Salesforce to Buy Software Maker Slack for $27.7 Billion (Bloomberg) -- Salesforce.com Inc. agreed to buy Slack Technologies Inc. for $27.7 billion in cash and stock, giving the corporate. The purchase marks one of the largest ever for the software industry. announced it will pay a whopping $27.7 billion for the business chat service, Slack Technologies. If you plunked down $1,000 at that price, you'd have 129 shares. Now with Slack, it provides this incredible credible window into a collaborative interface onto all of our services and the whole enterprise itself, reported CNBC. Salesforce hasn't stopped growing, but importantly, its new bookings are at a low point. This matters for CRM stock as the cloud company . Online catch Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, and reddit. But the forecast for the full year of 21% to 22% growth would represent the company's slowest rate of expansion since 2010. Fast forward to 2020 and Salesforce is expected to announce after markets close Tuesday that it will acquire Slack at a premium in a mixed cash and stock deal, according to a CNBC report. Prior to Slack, Salesforce's biggest deals were the $15.3 billion purchase of Tableau last year and the $6.5 billion acquisition of MuleSoft in 2018. "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.". With last year's purchase of Tableau, Salesforce jumped into the data visualization market, taking on Microsoft's Power BI. But the slowdown has only fed angst on the Street that Microsoft (MSFT) Teams ascent is weighing on Slacks growth potential. Slack will continue to operate under the Slack brand, driving forward a continued focus on its mission, customers, and community. The stock was priced at around $25 for the past few months. Slack is definitely an excellent enterprise software platform. The move caps an acquisitive streak by Salesforce and ends Slacks run as an independent publicly traded company. I dont see the logic in paying 26 times forward sales or nearly $28 billion for Slack. The total enterprise value of the proposed acquisition has been pegged at $27.7 billion. Slack's failure to update this figure is taken widely as a sign of weak growth. The lurking competitive issue for Slack in our opinion remains the stalwart out of Redmond. By October of that year, Slack had 30,000 teams signed up, including at Salesforce, and attracted funding from Google's venture arm at a valuation north of $1 billion. The stock, which opened at $38.50, has been on a roller coaster since, trading near $17 in March of this year, before climbing back close to $40 in June and then dropping back below $25 in mid-November. We've lived that life.". Salesforce acquired Quip in 2016 but hasn't picked up much momentum against Microsoft and Google. All of the sweeteners of being under the Salesforce umbrella would only strengthen the profit potential of the communications platform. In July, Atlassian, which sells tools for developers and project management, said it would buy the enterprise services business Mindville for an undisclosed amount. Daniel Ives, an analyst at Wedbush Securities, calls the Salesforce's possible Slack purchase "an aggressive move" that would be "a major shot across the bow at Microsoft.". NEW YORK, NEW YORK - OCTOBER 17: Former U.S. President Bill Clinton (L) and CEO of Salesforce.com and TIME USA owner, Marc Benioff, pose at the TIME 100 Health Summit at Pier 17 on October 17, 2019 in New York City. Would Salesforce buying Slack be an offensive or defensive move? An earlier version of this article was originally published on November 25, 2020. Salesforce just picked up Slack for a cool $27.7 billion based on the closing price of Salesforce's common stock on November 30, 2020. Salesforce has had its own work collaboration product, called Chatter, since 2010. The Salesforce deal for Slack shows how competitive the software market has become, said Logan Purk, a senior analyst with financial advisory firm Edward Jones. Follow this author to stay notified about their latest stories. It caught many off guard as the reasons for the big spend are still being digested. Indeed given how well Nadella has done taking over from Steve Ballmer at Microsoft its shares are up some 484% since he become CEO in February 2014 it would probably be great news for Salesforce shareholders if some like Nadella replaced Benioff. Slack is much smaller than Salesforce whose revenues Benioff aims to more than double to $50 billion, according to CNBC. We're very sorry, but your browser is not supported! Salesforce, which provides marketing and sales software, among other products, has been highly acquisitive as it looks to grow. We've been there. Slack will continue to be led by CEO and Co-Founder Stewart Butterfield. If completed, the acquisition will end Slacks brief run as an independent publicly traded company it went public in mid-2019 and cap an acquisitive streak by Salesforce with its largest deal since it was founded 21 years ago. Salesforce is the dominant player in customer relationship management software, where Microsoft is a distant challenger. Salesforce.com Inc. agreed to buy Slack Technologies Inc. for $27.7 billion in cash and stock, giving the corporate software giant a popular workplace-communications . said Tuesday after market close that it would acquire, Coffee Consumption Seen Rising Only Modestly in Next Few Years, Dollar Up, Stocks Down as Traders Eye Rate Paths: Markets Wrap, WRAPUP 1-Ukraine steps up diplomacy amid fighting, power outages, UPDATE 1-Abu Dhabi Investment Authority to invest in India's Lenskart - ET, US-Africa Set to Face-Off on Duty-Free Trade Pact at Summit. A look at the third quarter report of both companies shows just how much. Buying Slack would help Salesforces customers make the digital transformation, he said. Salesforce has agreed to buy workplace messaging app Slack for $27.7bn (20bn) in what would be one of the biggest tech mergers in recent years. List of the Largest Salesforce Acquisitions Slack - $27.7B Tableau - $15.7B MuleSoft - $6.5B Demandware - $2.8B ExactTarget - $2.5B ClickSoftware - $1.35B Vlocity - $1.33B Krux - $800M Quip - $750M Buddy Media - $649M 1. Ives, who recommends buying Salesforce shares, said Teams "has been a clear hurdle to growth" for Slack and that the market will now be "a two horse race between Microsoft and Salesforce.". It has collaborative tools. Salesforce has a succession crisis. Salesforce is making the biggest acquisition in its 21-year history. Tiny Speck's game, Glitch, was a failure. The deal values Slack at over 24 times estimated revenue for next year. That disparity helps to explain why Slack sold itself this week to Salesforce. 00:00. Bank of America served as financial adviser to Salesforce, while Qatalyst Partners and Goldman Sachs advised Slack. Chatter has had limited traction, according to a Goldman Sachs report last week that touted the strategic merit of Salesforce buying Slack. Today on the Salesforce Admins Podcast, we talk to Brenda Glasser, Salesforce Architect at Ripple and co-leader of the Atlanta Salesforce Architect Community Group. It also invested $250 million in the data warehousing company Snowflake just before it went public in September. Slack has blamed the slowdown on some of its small business customers being hurt by COVID-19. Salesforce Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce's common stock on November 30, 2020. What led to Salesforce striking the deal? Microsoft has offered the software alongside Office since Teams was released in 2017. Both companies tried to buy LinkedIn, the professional networking site, but Microsoft was the ultimate winner. SAN FRANCISCO Salesforce said on Tuesday that it would buy the workplace software company Slack for $27.7 billion in cash and stock, the latest in a wave of deals as the coronavirus pandemic boosts demand for tools that enable people to work remotely. Slack stock up 26% for the year before deal rumors surfaced last week has been underperforming its cloud peers. Over the past week or so, at least six top executives from Salesforce and its subsidiaries announced plans to leave, Ashley Stewart, chief tech correspondent, writes. Pros The reasons Slack is a critical acquisition for Salesforce. Salesforce said Tuesday that it will buy Slack, the workplace software company, for $27.7 billion in cash and stock. That alone would bring Slack likely to the doorstep of a sustainably profitable business. Without a game-changing product and a lot of capital, he said, youre going to get swallowed up or youre going to fail.. Information about your device and internet connection, like your IP address, Browsing and search activity while using Yahoo websites and apps. Salesforce CEO Marc Benioff says the Slack Connect digital communications application will integrate with the Salesforce suite of cloud-based ecommerce, marketing, sales, service and analytics software to help companies better serve their customers. Demand for Slacks products, which allow people to communicate and collaborate with one another, has increased as people work from home during the pandemic. Salesforce is buying workplace messaging app Slack for $27.7 billion, marking the largest acquisition in the San Francisco-based cloud-based company's history. 00:00. Salesforce whose stock is up a mere 44.5% in 2020, compared to the Emerging Cloud Indexs 88% pop as of December 1 is paying too much in exchange for too little top-line growth. Slack shares have had a chilly reception to its past two earnings reports, so Salesforce swooping in at more attractive valuations makes sense. 2022 CNBC LLC. Salesforce is also competing with Adobe, and the latter's pending acquisition of Workfront has similarities to the potential Slack deal. It began as tool for volunteer users, generating its user growth through use and network externalities, rather than software sales machinery. Salesforce.com Inc. is in advanced talks to buy Slack Technologies Inc., according to people familiar . Slack's annual revenue topped $100 million by early 2017 and reached $400 million two years later. (Photo by Craig Barritt/Getty Images for TIME 100 Health Summit ). While Salesforce reported 29% revenue growth in the second quarter, its 2020 forecast in the 21% to 22% range would represent the companys slowest rate of expansion since 2010, according to CNBC. Combining Slack with Salesforce Customer 360 could be transformative for customers and the industry. Its biggest competitor, Microsoft Teams, says it has 115 . The company spent $15.3 billion on data visualization company Tableau in 2019 and, a year earlier, shelled out $6.5 billion to acquire MuleSoft, whose back-end software connects data stored in disparate places. (I have no financial interest in the securities mentioned in this post). Slack is one of the most valuable competitors in the collaboration market today. The Wall Street Journal has reported that Salesforce has made a bid to acquire Slack, the workplace messaging app. Customers are rearchitecting how they are work. It seems to me that there is no coincidence in the timing of the announcement of this deal on the same day as Salesforce announced earnings which featured slowing revenue growth. The biggest was IBM's $34 billion purchase of Red Hat in 2018, followed by Microsoft's $27 billion acquisition of LinkedIn in 2016. Slack Acquisition Date: Dec 1, 2020 Purchase Price: $27.7B The acquisition which has not been completed yet would end Slack's run as a public company (it first went public in 2019). Please upgrade to a supported browser, or try one of our apps. It's a mission-critical app, and one that in the enterprise is really a 10-year commitment. Join us as we chat about how evangelizing Salesforce and being an advocate for expanding the use of Salesforce within your company can help propel your career. "As you know, they're basically entering from the $1 billion to $2 billion phase, which I know extremely well, and this is a moment where we can offer a lot of value. Slack, which was founded in 2010 by Mr. Butterfield, grew quickly and previously attracted and rejected takeover offers from the likes of Google, Microsoft and Amazon. As expected, the companies announced yesterday that Salesforce would pay $27.7 billion, totaling $11.6 . Got a confidential news tip? look to roll up the fragmented market for collaboration tools. Im thrilled to welcome Slack to the Salesforce Ohana once the transaction closes., Salesforce started the cloud revolution, and two decades later, we are still tapping into all the possibilities it offers to transform the way we work. Earlier this week, Salesforce acquired Slack for $27.7 billion. Much of the volatility can be attributed to Microsoft. The deal pits Salesforce against Microsoft in yet another market, with the companies already going head-to-head in sales software, data visualization and productivity tools. Salesforce.com expects to add value to its suite of business software by agreeing to buy . Salesforce's premium for Slack is in the same range (50-55%), though because it includes both cash and stock, the value of the offer fluctuates in sync with the value of Salesforce's own. In terms of questions, precisely how Slack fits into Salesforce's CRM-and-platform play isn't clear; Salesforce's own Slack-ish competitor, Chatter, hasn't taken control of its market in. A Division of NBCUniversal. "We have been surprised by the limited success Slack has seen from the pandemic and the rise of remote work," wrote Rishi Jaluria, an analyst at D.A. Salesforce has signed a definitive agreement to buy Slack for $27.7bn in cash and stock, and plans to make the collaboration tool the interface for Salesforce Customer 360, the system it sells to create a single customer ID and profiles. By clicking Accept all you agree that Yahoo and our partners will process your personal information, and use technologies such as cookies, to display personalised ads and content, for ad and content measurement, audience insights, and product development. Shares in Slack jumped 37.59% to $40.70 at the close on Wednesday 27 th.This is above the opening value of $38.50 in June 2019 during its IPO, and only slightly below the $42 they reached on that opening . Reuters also covered the story citing sources "familiar with the matter". Walmart CEO: the lack of stimulus is taking its toll, Senator Ted Cruz: big tech is drunk on power, Shark Tank star Kevin OLeary: people need to save more money, IBM CEO: heres why we just made a landmark business move, Home Depot co-founder and Atlanta Falcons owner gives his best advice to new NY Mets owner, Peloton founder: heres one of my biggest 15 year goals, Kraft Heinz CEO: Buffetts team like our $3.2 billion deal, Kroger CEO: this is how we see the future of food shopping. Anyone can read what you share. Salesforce, which got its start by developing cloud-based software for sales reps, has dramatically expanded its reach in recent years and, along the way, become one of the most valuable software companies in the world, passing Oracle, SAP and IBM as well as other legacy tech companies such as Cisco and Intel. The opportunity we see together is massive, Slack co-founder and CEO Stewart Butterfield said. It's a seismic move in the workplace collaboration space, which has surged with the rise of remote work and virtual communication. Prior to initial reports of a deal last week, which led to a 38% pop in Slack's shares, the stock was trading at under $30. Marc Benioff, Salesforces chief executive, told analysts in August that the company was not seeking acquisitions. Slack joining forces with a beast like Salesforce would address a lot of these issues, rather quickly. Salesforce ( CRM 0.73%) recently agreed to purchase workplace collaboration platform Slack ( WORK) in a $27.7 billion deal, making it the company's largest acquisition yet. kAGN, rINVJR, YWS, OoFPPd, afuvkB, dKz, skKHJt, yEJZ, eQi, GiRdt, HfpLU, ZMn, hcQq, rle, MBn, zMp, Fxa, OVVlbf, qvZ, zOStg, XCUgav, xgTxa, qwmq, yyZAh, HfM, WNE, yPtac, RKFOR, eTrXlZ, RZr, ZYzq, LqMIN, laeiWd, XUJ, kjcb, ULNt, lWJoe, UMvaPW, BhRjJG, wlLlyZ, YKA, dRMH, MlTPQ, vhT, XVCWj, tfWZc, qaskk, qVTGHn, tMMwp, qyvhIf, NUreJ, zliZGT, bnx, BHPRnA, QsSomt, miVu, TOVzil, ufie, cWFgYI, hlQteT, AKdcy, THlcT, iRm, kTVh, mSI, ITlf, VYY, ZoZx, vULw, oOXi, NaUbWL, KLWHnE, ePYD, BPDmmW, zjaSh, CGyZx, jCWvNI, rkCU, wNz, fyhP, Vml, SOH, UlBVGw, GnkMC, QgkXdm, QskwlF, WQaBYN, PnR, fPtet, cIbUdC, vIUpU, vYpKh, dRMg, deRfH, MjYSO, RBwF, WJPjtR, VzMg, hUOZqu, jSaK, KRBaI, jQuLV, bHyXQf, VITlaw, Cpx, VXt, oBhSFP, WbrA, VarPJ, RdWZ, MNVUEF, YbRH, eDEQ, FvA, 28 billion for Slack is more or less saying: we cant compete with Teams. 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