Based in New York City, Cloud-based Software Company, Salesforce, is reportedly having talks to acquire Slack.
The news about the potential acquisition of the workplace messaging app, Slack, was made known by Reuters.
According to sources, Slack has had a tough time attempting to fully capitalize on the switch to remote working.
Due to the first wave of the COVID-19 pandemic, Slack had faced heavy competition from others of its kind.
Prominent ones among them include Microsoft Corp’s Team, Asana, Google Drive, among others.
Further insight into Slack operation also reveals that the company stock is gradually reaching to meet up with last year’s high of $42.
As of the time of this publication, the company’s stock is trading at a new high of $40.70.
Also, the company’s shares recently increased by 24% to $36.58, which brought Slack’s market capitalization to about $21 billion.
On the other hand, Salesforce stock went down by 2.7% after the report of the companies’ potential deal.
Reason for Salesforce interest in Slack
For Salesforce, the potential acquisition of Slack is a very logical one as it allows the New York firm to extend its enterprise offering.
As you may have known by now, the ongoing pandemic has birthed a new reality.
It is, however, important for companies as much as individuals to adapt to the new trend to stay relevant.
Currently, we couldn’t get a specific figure that the potential acquisition may cost Salesforce.
However, giving Slack’s current market cap, the deal is expected to cost as much as $30 billion or more.
Founded in 2009, the American software company operates a corporate channel-based messaging platform.
Here, people can collaborate or perhaps execute a project or task collectively and simultaneously.
More so, users can integrate all their software tools and services and find the right information required to efficiently execute their tasks.
This year alone, the Slack app has been downloaded more than 12.6 million times, about a 50% boost from the same period in 2019.
The boost in Slack’s adoption isn’t surprising, giving that most corporate organisations have resulted in remote working.
Also, despite the massive boost, many people have left the platform for other alternatives. The reason for this is because of the economic fallout as a result of the pandemic.
Not many could easily afford the $8 monthly subscription; others prefer other alternatives that charge less.
To save operational costs, some companies switched to Teams, which offers many of Microsoft’s office software packages.
“I think Microsoft Teams has been able to capitalize on the opportunity better than Slack, partly because they give it away for free as a bundle,” Rishi Jaluria, an analyst who works at a research firm, said.
“Now Slack realizes that they might be able to get greater penetration as part of a larger company,” Jaluria added.
While this claim is not false, it is evident in Slack’s billing growth, which slowed in the three months to the end of July.
What Techuncode thinks
Salesforce has managed to scale through the pandemic with positive financial figures.
It raised its annual revenue forecast in August as the pandemic spurred demand for its online business software that supports remote work and commerce.
The company has also fortified its cloud business with newer acquisitions, spending over $16 billion in 2019 alone in an attempt to stand a chance against top dogs like Oracle Corp.
Slack’s acquisition wouldn’t be a tough challenge, as the company has kept a profitable financial year so far.
In the meantime, the deal is still a probability, and we will keep you updated as more event unfolds.