Opinion By Chandrashekar LSP, Country Manager, Zoho Corp (Canada)
Salesforce announced that they had acquired Slack—with its 12 millions users—for $27.7 billion dollars. The acquisition raised a lot of eyebrows in the media, and by the end of the day it was announced, Salesforce’s stock had dropped more than eight percent.
More than anything, this move is the continuation of a trend—like ServiceNow’s purchase of Element.AI and Facebook’s acquisition of Kustomer earlier in the week—that proves business apps cannot exist in silos. This provides further evidence that the tools needed for the modern workplace like collaboration tools, storage, and AI should be directly embedded into business suites, out-of the-box.
The importance of such tools – specifically communication tools like Slack – has never been more pronounced than now. For example, Slack jumped from six million users before 2020 to 12 million users since the pandemic shook up the world. Other collaboration and communication tools like Zoom and Microsoft Teams have seen massive jumps in users this year, with Zoom going from 10 million users to a whopping 300 million and Teams spiking from 75 million to 115 million since the pandemic.
On its face, Salesforce appears to be adding a tool to their suite that their customers need. The only problem is that many of Salesforce’s competitors already offer communication software within their platforms, at no cost to the user. Salesforce is hailing the move as continued progress on their path to creating their own “operating system”-style suite of apps. Others throughout the industry and media are praising this move as an extension of Salesforce’s already large capabilities and a significant growth of their market share.
But when you truly break down and analyze this acquisition and what it means for users of Salesforce and Slack alike, it is clear this will cause more problems than it solves.
Because of the changes in the world of business, not just this year but over the last several years, Salesforce is playing catch up, and that comes at a cost.
First, there is the cost of the acquisition. No small price, especially when you consider what else that money could have bought for Salesforce, or more importantly what that money could have built.
When coupled with the $15.7B they spent to acquire Tableau and its data visualization tools, Salesforce has paid out more than $40B this year. That could have been invested in the development of their own chat and data visualization tools, along with any other innovations they might think of.
And who truly pays that tab? Salesforce customers.
Another major issue in acquiring tools at a high cost rather than developing them in-house is the nightmare of integration.
Now Salesforce is faced with the challenge of integrating a variety of tools and platforms that have been built separately and not designed to function in tandem. This is made all the more complicated when you consider that Slack runs on Amazon Web Services, making this a multi-cloud integration, which brings with it a completely different and unique set of hurdles to tackle if one wants to achieve the seamless and productive user experience needed for today’s business environment.
No matter how well they handle the task of integration, they are bound to end up with somewhat of a Frankenstein network of tools, which will undoubtedly lead to a serious decrease in the user/employee experience.
Other questions surrounding this acquisition still remain, like what will happen to the existing Slack users who rely on the free tool for critical business communications? Or whether the staff at Slack will face similar fates as the employees who were shown the door right after the Element.AI acquisition?
But even when taking those unknowns out of the equation and simply looking at how such an acquisition will affect their own suite of tools and the user experience for their existing customers, it is tough to see how this is truly a win.