Prompt Cast
Slack's Acquisition by Salesforce: A Battle for Software Dominance
TLDR Salesforce's acquisition of Slack for $27.7 billion highlights the ongoing competition between Slack and Microsoft Teams, with Slack aiming to be the next Microsoft and Teams focusing on being a hub for all things Microsoft. The integration of Slack with Salesforce's customer 360 and the potential for Slack Connect to showcase its superiority over competitors are key factors in the acquisition, while Google's absence in the deal raises questions about missed opportunities.
Timestamped Summary
00:00
In this emergency podcast episode, the hosts discuss the acquisition of Slack and introduce their guest, Packy McCormick, who is a well-known Slack bull.
05:49
The acquisition of Slack by Salesforce for a total purchase price of $27.7 billion in cash and stock, with Slack remaining independent and Stewart Butterfield staying as CEO, marks the largest software deal since IBM bought Red Hat in 2018 and highlights the ongoing battle between Slack and Microsoft Teams.
12:14
Slack is growing faster than most companies, but its growth is slower compared to Zoom, and the reason for this is that Slack requires more setup and integration, making it less accessible than Zoom, which is why Slack's user count is significantly lower than Microsoft Teams, but Microsoft Teams is not a direct competitor to Slack, rather it competes more with Zoom, as Teams is meant to be a hub for all things Microsoft within an organization.
18:00
Slack wants to be the next Microsoft, while Microsoft Teams is focused on being a hub for all things Microsoft within an organization, and comparing Slack users to Teams users is like comparing apples to oranges.
24:41
Slack's integration with Salesforce customer 360 will create the operating system for the new way to work, transforming how people communicate and potentially serving as an on-ramp to the Salesforce ecosystem, while Slack Connect is a strategic focus for Slack and a key factor in its attractiveness to Salesforce.
30:47
Slack Connect is a way for people to try the Slack product before buying it, as it allows them to communicate with innovative partners in shared channels and experience the product's superiority over competitors like Microsoft Teams.
36:35
Salesforce is a traditional enterprise software company that sells its products through traditional methods and doesn't need to showcase its features until after the sale, which is often based on the assumption that the software will solve the buyer's problems.
43:11
Slack's decision to sell to Salesforce may have been driven by factors such as the potential for continued stock price decline, the opportunity to match Microsoft's distribution power, and the fatigue of dealing with competition and the pressures of being a public company.
49:04
The bear case for Slack as an independent company is that there are other workflow apps with built-in chat and collaboration, making Slack more of a backup or emergency tool, and the biggest threat is the emergence of newer, more advanced collaboration software that becomes the central hub for work.
55:04
Discord is seen as more customizable and better suited for gaming and influencer communities, while Slack has focused on the enterprise market and lacks certain features that Discord offers, such as better video and upgraded features.
01:01:16
The acquisition is interesting because it gives Slack access to Salesforce's extensive network and potential integration opportunities, and Salesforce can continue to grow its enterprise revenue by acquiring high-growth assets like Slack.
01:07:18
Google's absence in the Slack acquisition is surprising given the potential synergy between the two companies and the strong integration between Google Suite and Slack, and it could have been a missed opportunity for Google to expand its presence in the productivity software market.
01:13:13
Slack's tenure as a public company is graded as a C- due to their failure to meet market expectations and the negative narrative surrounding their competition with Microsoft Teams.
01:20:01
The potential F scenario for Slack within Salesforce is that the integration of the two products fails and Slack becomes more like Salesforce than Salesforce becomes like Slack.
01:26:27
The potential A+ scenario for Slack within Salesforce is that it becomes a successful new distribution channel for best-of-breed SaaS companies, allowing them to enter new markets and reach Fortune 100 companies.
Categories:
Technology
Business
