Salesforce.com announced that it agreed to buy workplace messaging app Slack Technologies in a $27.7 billion deal.
The deal enables Salesforce, the #1 CRM company, to provide a unified platform for businesses to connect their employees, customers and partners with each other and the apps they use, bolstering its enterprise portfolio. Salesforce reported third-quarter revenue of $5.42 billion.
Slack will become an operating unit of Salesforce and will continue to be led by CEO Stewart Butterfield.
Marc Benioff, chair and CEO of Salesforce, said: “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.”
For Slack, the deal comes as it struggles to fully capitalize on the switch to remote working during the COVID-19 pandemic. Some of the customers of Slack include Starbucks, Target and TD Ameritrade.
Slack changed workplace communications by focusing on real-time messaging that could be broken into conversations with groups assembled on the fly, a more nimble platform than email, Reuters reported on Tuesday.
Slack faces competition from Microsoft which is aggressively promoting its similar Teams product with integrated video and voice calling.
Microsoft has also bundled Teams with many of its office software packages, an added attraction for companies looking to save costs during the disruption caused by the outbreak.
“The deal allows Salesforce to get deeper into collaboration and business communication and it’s good for Slack, especially to grow their penetration into non-tech companies,” DA Davidson analyst Rishi Jaluria said.