The long-rumoured purchase of Slack by Salesforce has finally rumbled to the surface in a seismic deal for the enterprise software sector.
At over $27 billion, the deal is the eighth largest acquisition in tech history, and the biggest ever purchase for Salesforce, which paid a combination of cash and stock to add workplace messaging firm Slack to its cloud business software.
The highly acquisitive firm has made dozens of purchases over the last decade, absorbing the expertise of multiple firms to become a one-stop-shop that codifies several business processes into a single SaaS software platform; including email, file sharing, and work management, alongside the original CRM product.
But bringing communication into the mix has proven more difficult. Salesforce launched their homegrown Chatter app in 2010, yet it remained sidelined by the likes of Skype for Business, Microsoft Teams, and Slack.
Under Salesforce, Slack will continue to be led by CEO Stewart Butterfield, and remain independent as a standalone product, while the messaging tools are also integrated within the Salesforce ecosystem to help the combined company better compete against Microsoft.
“This is a match made in heaven.” said Marc Benioff, Salesforce CEO. “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.”
In the wake of Covid-19, the rush to remote working has fueled sky high valuations for cloud and remote companies. Yet this megadeal, alongside the $44 billion merger of US rating agency S&P Global and London-based market data and research company IHS Markit, suggest the high valuations may not be a barrier to deal-making in the coming year.
Instead, low interest rates and fiscal expansion could continue to create favourable market conditions, catalysing more large deals in this sector.