For the third year in a row, Salesforce is making its largest acquisition ever in Slack (expected to close in early 2022)—having acquired MuleSoft and Tableau in 2018 and 2019 respectively. We stated in our 2020 Vendor Rating for Salesforce that the company is more than just a CRM business now. With Slack coming into the fold, Salesforce will be positioned more strongly and broadly in the digital workplace space and employee experience (EX) world. Given the size of this acquisition (estimated at $27 billion), the strategy just as with the MuleSoft and Tableau acquisitions should be all about growth in this new addressable market for Salesforce’s stated revenue ambitions.
Salesforce has some smaller offerings for employee-facing collaboration capabilities with Chatter, Quip and Salesforce Anywhere, and more recently with its Work.com apps to aid in the pandemic response and recovery for workforces. In Slack, they will have the opportunity to offer more general purpose and horizontal employee workstream collaboration (WSC) capabilities to its 150,000 customers, of which there is about 90% overlap with Slack enterprise customers according to Marc Benioff. Salesforce also will have broader collaboration technology to tie customer experience (CX) with employee experience (EX), such as through Slack Connect. At Gartner, we see this as part of a 2021 top strategic trend which we call “Total Experience” (see “Top Strategic Technology Trends for 2021”) where superior shared experiences are created by interlinking the disciplines of CX, EX, UX and MX (multiexperience).
Gartner predicts that by 2024, organizations providing a total experience will outperform competitors by 25% in satisfaction metrics for both customer and employee experience.
In Gartner’s research on WSC, besides general productivity and IT operational use cases, we see that the top use cases are for service and sales, as well as customer interaction, B2B, and partner and consulting (see “Market Guide for Workstream Collaboration”). All these use cases align to Salesforce’s core functional areas, and Slack will likely be further exploited in more deeply integrated ways as the actionable interface to Customer 360 data. Salesforce had launched Salesforce Anywhere to drive this type of capability across its products, but just as with Tableau complementing native Einstein Analytics, Slack should complement native Salesforce collaboration. However, Slack is likely to remain the primary WSC offering, with some portfolio rationalization likely needed.
However, in the WSC market Gartner has seen Microsoft Teams become a default starting point in many organizations to address remote work, general productivity, and meeting needs. While Slack, in some enterprises, is also deployed along with Microsoft Teams, it has been challenged to differentiate and compete with the gravitational pull of Microsoft Office 365. Salesforce already competes with Microsoft in segments of the CRM market, as well as in the data and analytics market with Tableau vs Microsoft Power BI, and development platforms market with Salesforce Lighting and Heroku vs Microsoft Azure and Power Apps. This acquisition further increases the enterprise overlap between these two mega-vendors, particularly from a cloud and SaaS perspective targeting frontline and knowledge workers.
Finally, Salesforce’s success has also been largely due to its ecosystem of partners that it has enabled and cultivated through its AppExchange marketplace and Trailhead community. In major acquisitions, such as MuleSoft, Tableau and now Slack, their communities and ecosystems were important factors in the Salesforce strategy. While Slack’s platform already integrates with more than 2,400 apps, Salesforce should help elevate its ability to enable partners, professional developers, and even citizen developers using low-code and no-code approaches to build extensions and apps on the Slack platform, which is well suited for the overall Salesforce strategy playbook.
If you are a Gartner client and would like to discuss the impact of this acquisition, please reach out to your Gartner account executive to schedule an inquiry with me, Mike Gotta, Craig Roth or Larry Cannell.