Salesforce Acquires Slack: Why It Should Embrace Interop with Microsoft
In July 2021, Salesforce confirmed its acquisition of Slack for $27.7bn. The immediate sentiment was that Slack and Salesforce thought they would be better together—but insisted taking on Microsoft was not the main reason for their partnership.
Ron Miller of TechCrunch reported the expectation that comes from a deal of such high value and included a comment from Salesforce COO, Bret Taylor:
“From the Salesforce perspective, Taylor says that the Slack deal was worth the money because it really allows his company to bring together all the pieces of their platform, one that has expanded over the years from pure CRM to include marketing, customer service, data visualization, workflow and more.”
In this post, we explore the reasons why taking on Microsoft shouldn’t be top of the list for Salesforce—and why Salesforce should embrace interoperability with Microsoft.
Why Microsoft shouldn’t be Salesforce’s target
Teams and Slack have a combined 128 million+ daily active users.
With the recent acquisition, some feel that Microsoft is the logical target for Slack and Salesforce
While it’s reasonable for Slack and Salesforce to attempt to capture some of Teams’ users, it would be more practical for them to embrace interoperability.
Zeus Keravala, Founder and Principal Analyst at ZK Research, commented on potential targets:
“What should happen is that Slack and Microsoft Teams co-develop bi-lateral interoperability between the platforms so a Teams user could message a Slack user and vice versa.”
From a historical perspective, Microsoft hasn’t played as well with others as it could. Zeus went on to say:
“Even when Microsoft does interoperate, it's usually one-way and there's more benefit to Microsoft than the other vendor. Teams doesn't have the robustness or feature breadth of Slack. Salesforce should first target its own user base to gain a footprint inside companies and then expand from there.”
The feeling appears very much mutual when we asked Wayne Kurtzman, Research Director at IDC.
"Salesforce pivoted to become a more open platform, and Microsoft is slowly moving in that direction. Maybe too slowly for CIOs."
IDC research shows that companies are gravitating to collaboration apps that integrate with others, and are ready to adapt their security and governance to adopt them.
Narrowing in one on user base might also be counterproductive to Salesforce’s other recent acquisitions.
Who has Salesforce acquired?
Other than the planned Slack acquisition ($27.7bn), Salesforce has made some major acquisitions in recent times:
- Tableau ($15.7bn) 2019
- Mulesoft ($6.5bn) 2018
- Demandware ($2.8bn) 2016
- ExactTarget ($2.5bn) 2013
- ClickSoftware ($1.35bn) 2019
- Vlocity ($1.33bn) 2020
- Krux ($800m) 2016
- Quip ($700m) 2016
- Buddy Media ($649m)
Due to the reasons outlined above, and over $32bn spent on other companies in the last eight years, Microsoft cannot be Salesforce’s only target.
What will Salesforce do with Slack?
While there was a Slack outage in the first days of January 2021, many analysts are looking forward to what the companies will have to offer in the near future.
There’s bound to be growth of both Slack and Microsoft Teams.
Noting Slack’s previous tendency to not react as quickly to market changes as its competitor, Cestrian Capital Research said this:
“It falls to Salesforce to expand the revenue base of the Slack product in existing customers, and add new names to the Slack roster by cross-selling into the huge existing CRM base.”
Salesforce’s customer base is huge, and they are going to use this base to increase the number of Slack users going forward.
Alaa Saayed, ICT Industry Director at Frost & Sullivan, provided his thoughts on what Salesforce should do with the team communications platform:
“While Salesforce has the power to build its own enterprise collaboration stack, (integrating with team collaboration functionality - either via acquisition or leveraging Slack's existing relationship with Amazon Chime) this is dependent on Salesforce's execution plans during 2021 and forward. The potential is definitely there and I would love to see it.”
Alaa also commented on speculation of a name change or name merge.
“If I were Salesforce, I would maintain the Slack name with "Slack by Salesforce" and would enrich the brand with functionality from both existing assets and future acquisitions. In this sense, Slack would be the ‘new empowered Slack’ with more elements to compete with Microsoft Teams.”
Salesforce already has a chat tool (Salesforce Chatter) but it is primarily used by users of Salesforce CRM.
It is not widely viewed as an enterprise-grade messaging tool that is deployed standalone (like Slack or Microsoft Teams).
Both Chatter and Salesforce CRM already integrate with Slack.
How does Slack integrate with Salesforce?
83% of Fortune 500 companies used Salesforce.
Slack also boasts 43% of the Fortune 100 companies.
So, a Slack integration for Salesforce has always been a must.
Salesforce provides functionality for a variety of users.
Sales-specific benefits include:
- Increase sales force productivity and revenue
- Keep track of every customer interaction
- Automate redundant tasks and admin work
When Salesforce and Slack are integrated, you can:
- View and share key information about your accounts right where you’re already working with your team
- Search Salesforce from Slack by typing /salesforce [search term]
- Share messages both ways between Salesforce Chatter and your Slack channel(s)
Learn more about the Slack app for Salesforce in the Slack Help Center.
Conclusion
Since publishing this post, Salesforce has signed a definitive agreement to acquire Troops.ai. This is significant because Troops.ai has both a Slack integration and a Microsoft Teams integration.
Could this be the start of further integration and interoperability between Salesforce and Microsoft?
Mio's CEO Tom Hadfield talks to a large number of Slack and Microsoft Teams customers and employees every day.
Tom authors this concluding section, and answers why Salesforce should embrace interop with Microsoft.
Why Salesforce should embrace interop with Microsoft
Increasingly, Slack is finding itself in enterprise IT environments where it is deployed alongside Microsoft Teams.
Slack has strong loyalty amongst its core tech-savvy user base but has struggled to prevent Teams from becoming dominant in the world’s largest companies.
By positioning Slack as fully interoperable with Microsoft Teams, Salesforce can change the dynamic in the team collaboration market.
More and more customers will embrace Slack because of its tight integration with their existing tools, including Teams.
Seamless interoperability with Teams could become a unique differentiator for Slack.
Imagine being able to join Slack shared channels from within Microsoft Teams, or sending a direct message to a Teams user without leaving Slack.
Microsoft also has a lot to gain from embracing interoperability and urging competitors like Slack.
As a truly open ecosystem, Microsoft 365 will be difficult to displace as the defacto collaboration standard for companies worldwide.
As Salesforce integrates Slack throughout the Salesforce suite, customers will increasingly demand deep integration with Microsoft tools as well.
More Salesforce customers use Teams than Slack, and deep integration with both is the only way to deliver what customers need.
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