Salesforce Says $27.7B Deal Is a 'Match Made in Heaven'

Company hopes to take on Microsoft with Slack acquisition
By Newser Editors and Wire Services
Posted Dec 1, 2020 7:07 PM CST
Salesforce Is Buying Slack for $27.7B
"It's a match made in heaven," Salesforce chairman Marc Benioff says.   (AP Photo/Darron Cummings, File)

Business software pioneer is buying work-chatting service Slack for $27.7 billion in a deal aimed at giving the two companies a better shot at competing against longtime industry powerhouse Microsoft. The acquisition announced Tuesday is by far the largest in the 21-year history of Salesforce. The San Francisco company was one of the first to begin selling software as a subscription service that could be used on any internet-connected device instead of the more cumbersome process of installing the programs on individual computers. Salesforce’s flamboyant founder and CEO Marc Benioff hailed the "cloud computing" concept as the wave of the future to much derision initially. But software as a service has become an industry standard that has turned into a gold mine for longtime software makers, the AP reports.

Microsoft has developed its own thriving online suite of services, known as Office 365, which includes a Teams chatting service that includes many of the same features as Slack’s 6-year-old application. Slack in July filed a complaint in the European Union accusing Microsoft of illegally bundling Teams into Office 365 in a way that blocks its removal by customers who may prefer Slack. Microsoft also has been posing a threat to Salesforce’s main products, a line-up of tools that help other companies manage their customer relationships. "This is a stellar exit strategy for Slack," says Kate Leggett, an analyst at Forrester Research. "Microsoft Teams is eating Slack’s lunch." If all goes smoothly, Salesforce hopes to take control of Slack sometime from May to July next year. Benioff describes the merger as "a match made in heaven."

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