Slack CEO Stewart Butterfield was no less effusive than his future boss.
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 believe this is the most strategic combination in the history of software, and I can’t wait to get going, Butterfield said in a statement.
Ultimately, Slack was ripe for the taking. Entering 2020 it had lost around 40% of its value since it went public. Consider that after its most recent earnings report, the company lost 16% of its value, and before the Salesforce deal leaked, the company was worth only a few dollars per share more than its direct listing reference price. Toss in net losses of $147.6 million during the two quarters ending July 31, 2020, Slack’s uninspiring public valuation and its winding path to profitability and it was a sitting target for a takeover like this one. The only surprise here is the price.
Ron Miller & Alex Wilhelm
Fun fact, Stewart Butterfield was also the founder of Flickr, before selling the photo sharing site to Yahoo! for some $35 million. I don’t know enough about Salesforce to have an opinion about how this acquisition will turn out in a couple of years, but at least its founder continues to manage Slack from within its new owner. So maybe it has a better chance long term to not end up like Flickr…
I am slightly curious what will happen with Slack’s antitrust action against Microsoft over the bundling of Teams in the Office suite. I suspect it will be quietly dropped, now that Slack itself will likely be integrated into Salesforce’s productivity software. But such an integration would make it even harder for Slack to compete with either Teams or email: if customers are asked to buy the full Salesforce package instead of a standalone product, who would make a full switch away from Microsoft Office – or pay for both software suites?!
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