Source Code: Your daily look at what matters in tech.

source-codesource codeauthorDavid PierceNoneWant your finger on the pulse of everything that's happening in tech? Sign up to get David Pierce's daily newsletter.64fd3cbe9f
×

Get access to Protocol

Your information will be used in accordance with our Privacy Policy

I’m already a subscriber
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.

Does Elon Musk make Tesla tech?

Between the massive valuation and the self-driving software, Tesla isn't hard to sell as a tech company. But does that mean that, in 10 years, every car will be tech?

You know what's not tech and is a car company? Volkswagen.

Image: Tesla/Protocol

From disagreements about what "Autopilot" should mean and SolarCity lawsuits to space colonization and Boring Company tunnels, extremely online Tesla CEO Elon Musk and his company stay firmly in the news, giving us all plenty of opportunities to consider whether the company that made electric cars cool counts as tech.

The massive valuation definitely screams tech, as does the company's investment in self-driving software and battery development. But at the end of the day, this might not be enough to convince skeptics that Tesla is anything other than a car company that uses tech. It also raises questions about the role that timeliness plays in calling something tech. In a potential future where EVs are the norm and many run on Tesla's own software — which is well within the realm of possibility — will Tesla lose its claim to a tech pedigree?

Keep Reading Show less
Becca Evans
Becca Evans is a copy editor and producer at Protocol. Previously she edited Carrie Ann Conversations, a wellness and lifestyle publication founded by Carrie Ann Inaba. She's also written for STYLECASTER. Becca lives in Los Angeles.

As President of Alibaba Group, I am often asked, "What is Alibaba doing in the U.S.?"

In fact, most people are not aware we have a business in the U.S. because we are not a U.S. consumer-facing service that people use every day – nor do we want to be. Our consumers – nearly 900 million of them – are located in China.

Keep Reading Show less
J. Michael Evans
Michael Evans leads and executes Alibaba Group's international strategy for globalizing the company and expanding its businesses outside of China.
Protocol | Workplace

Apple isn’t the only tech company spooked by the delta variant

Spooked by rising cases of COVID-19, many tech companies delay their office reopening.

Apple and at least two other Silicon Valley companies have decided to delay their reopenings in response to rising COVID-19 case counts.

Photo: Luis Alvarez via Getty

Apple grabbed headlines this week when it told employees it would delay its office reopening until October or later. But the iPhone maker wasn't alone: At least two other Silicon Valley companies decided to delay their reopenings last week in response to rising COVID-19 case counts.

Both ServiceNow and Pure Storage opted to push back their September return-to-office dates last week, telling employees they can work remotely until at least the end of the year. Other companies may decide to exercise more caution given the current trends.

Keep Reading Show less
Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.
Protocol | Workplace

Half of working parents have felt discriminated against during COVID

A new survey found that working parents at the VP level are more likely to say they've faced discrimination at work than their lower-level counterparts.

A new survey looks at discrimination faced by working parents during the pandemic.

Photo: d3sign/Getty Images

The toll COVID-19 has taken on working parents — particularly working moms — is, by now, well-documented. The impact for parents in low-wage jobs has been particularly devastating.

But a new survey, shared exclusively with Protocol, finds that among parents who kept their jobs through the pandemic, people who hold more senior positions are actually more likely to say they faced discrimination at work than their lower-level colleagues.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Protocol | Enterprise

Alphabet goes deep into industrial robotic software with Intrinsic

If it succeeds, the gambit could help support Google Cloud's lofty ambitions in the manufacturing sector.

Alphabet is aiming to make advanced robotic technology affordable to customers.

Photo: Getty Images

Alphabet launched a new division Friday called Intrinsic, which will focus on building software for industrial robots, per a blog post. The move plunges the tech giant deeper into a sector that's in the midst of a major wave of digitization.

The goal of Intrinsic is to "give industrial robots the ability to sense, learn, and automatically make adjustments as they're completing tasks, so they work in a wider range of settings and applications," CEO Wendy Tan-White wrote in the post.

Keep Reading Show less
Joe Williams

Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

Latest Stories