Power

Salesforce is buying Slack to try to own the future of work

Salesforce wants to be where everyone does their job. And that now starts with Slack.

The Slack logo at the New York Stock Exchange

Microsoft or Slack: A turning point for enterprise software.

Photo: AFP/Getty Images

Comparisons have never been kind to Slack. Especially in 2020. Throughout the pandemic and the remote-work revolution it created, Slack has been constantly compared to Zoom, which rode unprecedented growth to near-mainstream adoption. Much of Zoom's rise, of course, came from outside its traditional business: Schools, hospitals, happy hours and knitting classes all went virtual, and all went to Zoom.

The other product constantly mentioned in the same breath as Slack was Microsoft Teams, which more than tripled its user base in 2020 to 115 million daily active users. This, of course, is not a fair fight: Teams is part of the Office 365 bundle, and while it's always hard to beat free, it's particularly hard to do so in a time of huge economic uncertainty. When Slack filed an antitrust complaint against Microsoft, it begged for a level playing field: "We're confident that we win on the merits of our product, but we can't ignore illegal behavior that deprives customers of access to the tools and solutions they want," Slack VP of communications and policy Jonathan Prince said.

Put together, Slack went from one of the hottest companies in the next generation of work tools to something more like MySpace or Friendster, a company clearly on the right track but unable to win the market. Zoom's share price has risen more than $400 this year, while Slack was up about $7. Until last week, that is, when Slack stock suddenly jumped more than 20% on rumors that Salesforce was looking to buy the company.

The rumors were true: Salesforce announced it is acquiring Slack for $27.7 billion, in a combination of cash and Salesforce stock. Already, the combined companies are touting Slack as "the new interface for Salesforce Customer 360" and something like the new front door for all things Salesforce. "This is a match made in heaven," Salesforce's CEO Marc Benioff said in a statement. "Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world. I'm thrilled to welcome Slack to the Salesforce Ohana once the transaction closes."

Buying Slack pushes Salesforce even closer to becoming an all-in-one suite of work tools, not unlike Office 365. Most of its big-number acquisitions in recent years — from $6.5 billion on MuleSoft to $15.7 billion on Tableau to $750 million on Quip — have been on new software and tools outside of its core CRM business. The company clearly sees an opportunity in the pandemic: Benioff said earlier this year that "My personal belief is always that in a moment of crisis, you need to invest through it." He said he saw 2020 as a moment of huge transition in how companies operate and do business, and that he believed "No one is better positioned than Salesforce to accelerate out of this crisis and bring customers into the new normal." Slack helps bring all the company's disparate pieces together.

In a way, selling to Salesforce also gives Slack a better chance to achieve its original vision. To listen to Stewart Butterfield, he never really wanted to kill email. What Slack actually set out to do was help connect all the other tools people use, to become the hub of a workplace that felt increasingly siloed in dozens of different apps. It just happened that chat windows were a really good place to start.

But here, too, Slack finds itself in unflattering company. Office 365 is also the giant in the online-workplace space. Zoom has used its newfound hugeness to try and become the center of users' workflow; Dropbox has completely redesigned its product to do the same; Monday and Asana and many others are hoping to be the next big platforms for people to share and store and do work. Meanwhile, Google renamed its productivity suite to Workspace, in case it wasn't obvious what it was trying to do.

The Salesforce acquisition seems likely to lead to Slack doubling down on being a work tool. If you wanted to fault Slack for one thing, it would be for failing to notice and double down on the fact that all the things users wanted at the office — a way to share information quickly, a way to keep in touch, a way to feel more connected — were the same things they now needed in the rest of their lives. Discord seized on the idea, broadening its scope from gamers to an all-in-one communication tool. Zoom did the same, briefly lamenting its everyday appeal before finding ways to optimize for (and make money from) those new users.

Butterfield expressed interest in this idea, telling Wired that "we think about Slack as for groups of people who are aligned around the accomplishment of some goal or set of goals." He mentioned planning a wedding, managing a family, running kids' soccer leagues. But that never became a core part of Slack's approach to the world. During the pandemic, Discord became "Your place to talk," but Slack stayed "Where work happens."

If it's true that workplace communications tools are better sold as an add-on to something else, Salesforce may actually represent Slack's best hope. According to Okta's research, Salesforce is the second most popular app used by its customers, which represents a good sample of the tech-forward business world. (Slack on its own is No. 6 on Okta's list.) Office 365 is in first place, well ahead of the field, but Salesforce could give Slack its biggest possible path to new customers.

Integrating with Salesforce also makes the Slack-over-Teams pitch far easier, since so many organizations already pay for Salesforce software. If Slack can integrate into the rest of Salesforce's tools the way Teams does into Office 365, it could also win the it's-already-right-there battle that so often decides which services companies use. Large companies that use both Office and Salesforce might well use both Teams and Slack. By not remaining independent, Slack actually has a better chance to win on the merits of its product.

The harder challenge for Salesforce might be integrating Slack without losing the hip, tech-forward feel that turned millions of users on to Slack in the first place. "Salesforce has an opportunity to make their ecosystem truly valuable to every employee with the addition of Slack," said Wayne Kurtzman, an analyst at IDC, "but they need to take great care to retain the loyalty of the Slack faithful."

Slack is surely an easier acquisition than LinkedIn or Twitter would have been for Salesforce, and can make it an important part of the future of work. The headwinds pushing against Slack won't give way anytime soon as Zoom and Teams and the rest of the industry keep pushing to be the center of the modern workplace. But Salesforce and Slack together are a formidable competitor.

Protocol | Policy

5 things to know about FCC nominee Gigi Sohn

The veteran of some of the earliest tech policy fights is a longtime consumer champion and net-neutrality advocate.

Gigi Sohn, who President Joe Biden nominated to serve on the FCC, is a longtime net-neutrality advocate.

Photo: Alex Wong/Getty Images

President Joe Biden on Tuesday nominated Gigi Sohn to serve as a Federal Communications Commissioner, teeing up a Democratic majority at the agency that oversees broadband issues after months of delay.

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Adobe wants a more authentic NFT world

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Adobe's Content Credentials will allow users to attach their identities to an image

Image: Adobe

Remember the viral, fake photo of Kurt Cobain and Biggie Smalls that duped and delighted the internet in 2017? Doctored images manipulate people and erode trust and we're not great at spotting them. The entire point of the emerging NFT art market is to create valuable and scarce digital files and when there isn't an easy way to check for an image's origin and edits, there's a problem. What if someone steals an NFT creator's image and pawns it off as their own? As a hub for all kinds of multimedia, Adobe feels a responsibility to combat misinformation and provide a safe space for NFT creators. That's why it's rolling out Content Credentials, a record that can be attached to a Photoshop file of a creator's identity and includes any edits they made.

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Protocol | China

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The Oura Ring was a sleep-tracking hit. Can the next one be even more?

Oura wants to be a media company, an activity tracker and even a way to know you're sick before you feel sick.

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Photo: Oura

Oura CEO Harpreet Rai swears he didn't know Kim Kardashian was a fan. He was as surprised as anyone when she started posting screenshots from the Oura app to her Instagram story, and got into a sleep battle with fellow Oura user Gwyneth Paltrow. Or when Jennifer Aniston revealed that Jimmy Kimmel got her hooked on Oura … and how her ring fell off in a salad. "I am addicted to it," Aniston said, "and it's ruining my life" by shaming her about her lack of sleep. "I think we're definitely seeing traction outside of tech," Rai said. "Which is cool."

Over the last couple of years, Oura's ring (imaginatively named the Oura Ring) has become one of the most recognizable wearables this side of the Apple Watch. The company started with a Kickstarter campaign in 2015, but really started to find traction with its second-generation model in 2018. It's not exactly a mainstream device — Oura said it has sold more than 500,000 rings, up from 150,000 in March 2020 but still not exactly Apple Watch levels — but it has reached some of the most successful, influential and probably sleep-deprived people in the industry. Jack Dorsey is a professed fan, as is Marc Benioff.

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