Yesterday the final announcement was made that Salesforce acquires Slack for 27bn USD. Marc Benioff is quoted to see "a marriage in heaven".
While the acquisition in my point of view is the best possible outcome for Slack, I have no longer an excuse to kick down the road this quick piece about Slack since long in the making. It addresses some key issues about the business model, the situation in the SaaS space and explains why an acquisition will be the best that can happen to Slack.
The case of Slack – worth a review for SaaS market and enterprise software observers
As the end of July always provided some quieter moments, even in time on Covid-19, I had the time to review some older client’s briefings and internal research papers. This brought a company on the desk again – Slack. When we discussed Slack the first time with clients, I got the question of why I was so picky on Slack with regard to the solution and the business model.
The particular reason is and was that Slack is the poster boy company for a number of trends in the SaaS space and in B2B software worthwhile discussing.
The overpromising solution
Discussing the case of Slack, one needs to remember the initial promise and context of the company. The problem to solve was bad email communication and replacing it with a much better tool for communication. This solution would be more efficient and time saving.
Context was the imminent success of social media networks and the strongly felt need to transfer the “new freedom of communication in the private to the enterprise space. Thus, it was a kind of consumer product for companies onboarding users for free. And it had the promise to be cooler than regular office tech for young professionals, mostly in the IT space.
In technology and consumer markets there is a golden rule – let users choose and follow. While this approach mostly right in most cases, Slack is a B2B product, not a consumer product.
Basically this context is the background for a number of really interesting stats and contradicting facts around Slack like a very loyal user base, low churn, but also slow Growth, slow adoption and monetization.
Overvalued with regard to the business case and its functionality
Therefore, the at the time verdict, like in July and today is – the solution and the company is