The CEOs of three of Slack's closest allies say Salesforce's $27.7 billion takeover of the workplace chat app will spur growth for the rest of the software industry

  • Salesforce's mega-deal to acquire Slack for $27.7 billion will have implications for the rest of the software industry, three company leaders tell Business Insider.
  • Slack is known for integrating with other workplace tools and providing a central place to get work done, so this deal means Slack's importance grows in the eyes of company executives.
  • The deal has the potential to change the balance of power by creating a real alternative to Microsoft, and that's good for every other company as well, Box CEO Aaron Levie said.
  • PagerDuty CEO Jennifer Tejada said the deal also shows how important it is for enterprise software to be built like consumer tools.
  • Okta CEO Todd McKinnon said it's also indicative of the maturity of the cloud. If Salesforce handles the acquisition correctly, Slack "could be the nexus of that modern collaboration cloud," he said.
  • Visit Business Insider's homepage for more stories.

Salesforce's mega deal to acquire Slack for $27.7 billion will have a ripple effect on the rest of the software industry, according to the leaders of three of Slack's peer companies. The biggest implication: More growth for everyone. 

Box CEO Aaron Levie, PagerDuty CEO Jennifer Tejada, and Okta CEO Todd McKinnon — who all lead companies that are long-time partners with Slack — each weighed in on the deal, and how it will create a counterbalance to Microsoft's power and influence in the market and spur growth for many of Slack's peers — as long as Salesforce gets the integration right.  

"I think it's going to be an industry-altering move, in terms of the power dynamic between the other essentially biggest player in the market: Microsoft," Box's Levie told Business Insider. "It's great for the ecosystem. It's great for startups, great for big companies, because you want there to be a very rich dynamic ecosystem that you can build into, and customers have choice." 

Slack already integrates with other workplace tools and provides a central place to get work done. Teaming up with Salesforce will strengthen its connections with Salesforce's sales, service, marketing and commerce tools and, given how many companies use Salesforce for those services, it positions Slack to grow, Levie said 

It also means CIOs and company leaders will start to see Slack as a much bigger part of their IT strategy. That in turn can propel the growth of companies like his. Slack has partnerships with Box, Okta, PagerDuty, Zoom, Atlassian and many other software players. 

"Enterprises and CIO have to start to think about, how do they bring together these best of breed applications?" Levie said "If Slack is a much bigger part of their IT strategy, then they need to make sure that they have a content management strategy for that, an identity strategy. This is great for Okta. This is great for Zoom." 

Companies are increasingly choosing "best of breed" tools, because employees prefer using them, versus buying into suites of products, according to PagerDuty's Tejada. Slack was known for being loved by users, to the point where companies would sign up to appease employees. 

This blockbuster acquisition shows how important it is for enterprise software to be built like consumer tools, she said, meaning that it is as easy and convenient to use as the technology people turn to in their everyday lives. 

"PagerDuty, Slack, and Zoom are great examples of best in breed platforms that have been built from the user backward," Tejada told Business Insider. "I think as a result, you see some of the largest enterprise software companies in the world looking for ways to meet the new demands of modern employees."

Okta CEO McKinnon, who used to work at Salesforce in the 2000s, says the deal is also indicative of the cloud markets maturity. His theory is that there will be a few dominant players in each category of the cloud, and that one of those will be a "communication cloud." If Salesforce handles the integration correctly, Slack "could be the nexus of that modern collaboration cloud," he said. 

In order for that to happen though, Salesforce will need to grow the capabilities of the product. 

"You're going to have to have email around that," he said. "You're going to have to have video around that."

If Slack gets sucked into Salesforce's mission instead of maintaining its own path, then it may not be able to achieve that, he said, allowing another player (like Zoom or Microsoft Teams) to reign. 

What all three executives agree on, though, is that there's much more growth in the industry to come, and Salesforce buying Slack will propel that forward. 

"The reality is actually these markets are so much larger than we realize," Levie said. "The vast majority of the world isn't on these platforms yet. I think there's growth for all of these technologies for many, many years to come."

Got a tip? Contact this reporter via email at [email protected] or Signal at 925-364-4258. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

Source: Read Full Article