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Slack is about to have a new owner, but no one really knows what the $ 200 billion company does.
WWhen Salesforce formally announced its intention to buy Slack for $ 27.7 billion yesterday, there was a notable elephant in the room: While Slack has become widely known as a workplace messaging tool, Salesforce is known as a company that Well, a lot of people find it generally mysterious. Co-founder of Radiotopia and 99% invisible Host Roman Mars seemed to speak for many when tweeted in response to the Slack news: “I can finally understand at least one thing Salesforce does.”
Tech Writer Justin Pot tweeted almost the same. Many others chimed in with similar joking explanations, unflattering comments about the company’s 1,000-foot San Francisco office tower, and at least one claim that Salesforce’s confusion reveals “The vaporization of production under late capital”.
For the stock market, Salesforce is no mystery: It’s a $ 200 billion company with 2019 revenue of more than $ 17 billion and earnings of about $ 1.74 billion in the latest quarter. It has been around for more than two decades, was founded by Marc Benioff, and has made more than 60 previous acquisitions.
Yes yes but what it is that? What makes it do? Even the reports on the Slack acquisition seem to dodge the question. At New York Times story about the deal, it is not until paragraph 18, after a thorough discussion of the details of the deal and Slack’s business, that we are told that the acquirer is a company that “provides sales and marketing software among other products” . Others labeled the company as a maker of “technology that helps companies sell products” or simply a “software giant.”
All these things are true. Salesforce is the so-called software-as-a-service company, offering a variety of tools that help companies sell to more customers or stay in useful contact with existing ones (slang: CRM). Most of these tools, which take the form of software that compiles customer data for a sales team or manages and tracks e-commerce orders and deliveries, focus on sales and marketing, customer service, etc. Salesforce’s past acquisitions have been in the realm of helping companies communicate more effectively with other companies: data analytics company Tableau, software integration company MuleSoft, e-commerce technology specialist Demandware, and a bunch of other companies you’ve probably never heard of, unless they’re directly relevant to your work (and even then, maybe not?).
And that highlights what Salesforce does. It’s no wonder that a lot of people don’t know the details of a B2B giant that basically has no consumer-oriented products. I suspect that Salesforce’s perplexity is most acute in the Bay Area, and that this is precisely because its Salesforce Tower headquarters is a prominent, relatively recent, and perhaps not universally popular addition to the San Francisco skyline, so everyone knows the name, but many have no reason to be familiar with your actual business. Similarly, his name appears in company headlines on stories that focus more on financial performance than on the details of their offerings, so it rings like a bell and remains a mystery at the same time. And if you’ve missed any of them, you’ve probably seen one of their many commercials as a result of $ 7.9 billion ad spend this year alone.
To be clear, a lot of people obviously do know what Salesforce makes, manufactures and sells, because they use Salesforce products (or services) every day. In fact, the company has an annual conference and networking event called Dreamforce that in 2019 attracted more than 170,000 attendees from the “Salesforce community,” made up of people in sales and marketing across multiple industries. (This year, naturally, it’s online, and it’s probably no coincidence that Slackquisition arrived just in time for its launch today.) Actually, my introduction to Salesforce happened a couple of years ago when I needed to take a trip to San Francisco and was having problems because the dates were coinciding with Dreamforce, which I had never heard of; For me, Salesforce became “the reason I can’t get a hotel room.”
Slack, by comparison, is a much more consumer-oriented brand, already made a verb by millions of office workers even before the pandemic and probably even more in the work-from-home era. As I’ve written before, it also appeared on the scene as a boisterous startup that promised to “kill” email, which is the kind of dubious claim that is a scam for the tech press.
However, it turned out that Slack didn’t end up having the breakthrough that, for example, Zoom achieved during the pandemic. But observers of the deal seem to agree that Salesforce is paying a premium over Slack’s stock price because the mothership seeks to remain competitive with Microsoft, which offers its own set of B2B products and is obviously widely known. in the general market. But perhaps what Salesforce is really acquiring is a brand that people have not only heard of, but really understand.
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