Salesforce Buys Slack to Compete With Microsoft

Microsoft Corporation (MSFT) faces the possibility of increased competition for its Teams product, an enterprise collaboration software platform, in the face of the announcement that, inc. (CRM) has agreed to purchase Slack Technologies, Inc. (WORK) for $27.7 billion. In a statement, co-founder and CEO Marc Benioff claimed that this acquisition "will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world."

This move represents a competitive counterpunch against Microsoft, which recently made a major move designed to increase its own standing in's principal market. In October 2020, Microsoft announced a partnership with Adobe Inc. (ADBE) and privately held startup to offer customer relationship management (CRM) software solutions utilizing artificial intelligence (AI).

  • Microsoft faces a new competitive challenge in collaboration software.
  • Slack is being acquired by
  • Salesforce Customer 360 will be integrated with Slack.
  • Microsoft Teams has grown rapidly, while Slack has struggled.

Significance for Investors

While Microsoft Teams has enjoyed explosive growth, from about 13 million daily active users (DAUs) in mid-2019 to over 115 million DAUs recently, the last time that Slack reported DAUs was in September 2019, when that figure was 12 million. Slack's failure to update this figure is taken widely as a sign of weak growth.

Nonetheless, says that its plans to integrate Slack with its own Customer 360 platform will be "transformative for customers and the industry." In 2018, shut down its own collaboration tool, called Chatter, apparently in response to low adoption by customers.

Whether the acquisition of Slack by actually creates a serious competitive threat to Microsoft Teams remains to be seen, however. This will depend on how well the planned integration of Slack and Customer 360 proceeds, and whether can create attractive product bundles to compete with Microsoft offerings that include Teams.

An interesting footnote is that Microsoft reportedly declined an opportunity to acquire Slack for about $8 billion several years ago.

Microsoft Teams vs. Slack

Microsoft Teams is a chat-based collaboration platform whose key features include document sharing, online meetings, online video calling, and screen sharing. It is included at no extra charge with Microsoft365 and Office365. With additional licensing, it can offer audio conferencing and even a full telephone system.

When it comes down to choosing Microsoft Teams or Slack, a detailed review by a software consulting firm ends with this summary: "Teams offers immediate Office 365 integration, sophisticated video conferencing capabilities, state-of-the-art security, and compliance features. Meanwhile, Slack offers an easy-to-use free tier and plenty of third-party integrations. Typically, the decision comes down to whether your business has an Office 365 subscription. For businesses that use Office 365, the benefits of having data contained in the same ecosystem prevents operational silos. However, for businesses looking for a rapid solution outside Office 365 with basic video conferencing capabilities, Slack may be the perfect choice."

Article Sources
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  2. Investopedia. "Microsoft Partners With Adobe and on Advanced CRM,"

  3. MarketWatch. "Salesforce's deal for Slack creates a bigger threat to Microsoft,"

  4. Tech Crunch. "Source: Microsoft mulled an $8 billion bid for Slack, will focus on Skype instead,"

  5. Compete 366. "What is Microsoft Teams and who should be using it?,"

  6. Entrance Software Consulting. "Microsoft Teams Vs Slack: What’s The Difference?,"

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