![]() Slack, on the other hand, will benefit from exposure to Salesforce’s range of enterprise customers. The company also has a goal of reaching a market cap of $1 trillion, which will bring the cloud developer closer to catching up with its main competitor, Microsoft. Salesforce hopes that this deal will help the company in maintaining an annual growth rate of above 20% to reach its ambitious target of $28 billion in annual revenue by 2023. Salesforce’s previous $750 million acquisition of Quip, a document-sharing service provider, was also aligned with its vision of a more collaborative enterprise platform. However, Chatter saw limited success and has since been transformed into a broader online community software named Community Cloud. This will not be Salesforce’s first attempt at entering the employee collaboration market, as in 2009 the company launched Chatter, a real-time communications product similar to that of Slack. Furthermore, it is hoped that both firms will be able to explore the potential opportunities that stem from integrating internal and customer communications onto one platform. ![]() Slack seems to be Salesforce’s next piece of the puzzle in creating a more social and collaborative enterprise cloud platform, which CEO Mark Benioff called “the interface to everything”. Deal synergiesīeing the largest deal in the company’s history, Salesforce hopes that the integration of Slack’s collaboration software onto its cloud platform would allow the tech giant to expand its focus from customer-facing products and into the growing market for employee collaboration. The company went public in 2019 at a market cap of $19.5 billion, but has seen its valuation drop by 40% by the beginning of 2020 due to lackluster earnings. Founded in 2009 as a game developer under the name Tiny Speck, the company launched its widely successful real-time collaboration application in 2013 and has become one of the hottest software companies in the last decade, changing its name to Slack in the process. However, Slack’s growth lags significantly behind other software developers such as Zoom, which grew 366% year-on-year for the same period. Slack has also benefited from the work-at-home economic shift, with revenues growing by 39% year-on-year in the third quarter of 2020. The recent growth is partially driven by global lockdown conditions which has generally boosted the revenues of software companies, but is also due to the company’s recent product growth with the addition of cloud payments and marketing data solutions. That leaves an earnings-per-share figure of $4.62, which is well above analysts’ predictions. Salesforce has had a good year financially, surpassing $21 billion in annual revenue for 2020. The firm is one of the largest software companies in the world, employing 49,000 people around the world and currently sitting at a market value of over 204 Billion. Company overviewįounded in 1999, Salesforce is an American cloud software company which primarily offers CRM services. Despite the drop in value, Salesforce and Slack are confident that this deal aligns with the strategic objectives of both firms, combining Slack’s business communications software with Salesforce’s Customer Relationship Management (CRM) products to create a comprehensive and collaborative enterprise platform. ![]() Meanwhile, Salesforce’s stock plummeted by 15.4% from before the deal was announced, leading to a total loss in market value of $32 billion USD. ![]() Markets reacted immediately as Slack’s stock price soared by 38% within the first day. ![]() This acquisition would go down as the second largest software transaction in history, the price of which represents a 55% premium to Slack’s market cap at the time of announcement. To cap off an extraordinary year for businesses worldwide, Salesforce has officially announced on the 1st of December, 2020 that it would be acquiring collaboration software developer Slack for $27.7 billion USD. ![]()
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