Thoughts on the Slack Acquisition

Turns out that user adoption isn’t the same thing as account penetration.

It’s been a few days since Salesforce announced its intention to buy Slack, giving us time to reflect on what it means for the enterprise tech landscape. The arrangement works out to a 55% premium over the current share price. At $27.7B, it is the most important deal of its kind since IBM’s purchase of Red Hat and one of the biggest software acquisitions ever. All said, the buy-out is a show of confidence in Slack’s product, its progress to date, and foretells of a powerful new alignment.

But it feels like the end of something else. For Slack to be swallowed by one Big Tech juggernaut (Salesforce) predicated on the competitive threat of another (Microsoft) says that long-standing incumbents continue to dominate the conversation around enterprise tech. That domination translates to control over who benefits by workplace technology, by how much, and by what specific solutions. So it may feel like the resurgence of a top-down world where there is little room for small players and compelling alternatives to the offerings - and profits - of only a few.

Part of this sentiment comes from how many tech entrepreneurs see Slack. It is a touchstone. Its product has something to say in response to bureaucracy (that it is too slow). It has something to say about lines of authority and communication (that they need to be flexible and less hierarchical). And it has something to say about agility (that teams should be easy to assemble and disband). Slack is by no means the perfect product. But it has a clear and relevant point of view. And one that is refreshingly different than most of the tools Big Tech continues to pump into the enterprise. The way many of us think about Slack influences our attitude toward its acquisition. Yes, it looks like a success story. Even then, it is easy to be of two minds about it.

The acquisition reaffirms ideas we should all be familiar with by now. First, that great products and great businesses are not the same thing. Slack may be a great product. But it is not a great long-term business. At least not in its current state, with the growth objectives it has and with the competitive threat it faces. Second, that user adoption and enterprise account penetration are not the same thing. Autonomous teams and startups love Slack. It is a breeze for them to get started. But when you want to move a ten thousand employee company onto a single collaboration platform, you have to eliminate a different set of friction points. Lastly, it should remind us that you don’t have to do this alone. In fact, you can’t. Innovation is not a lonely game of independence. It is a social process. The combination of ideas and software can be very powerful, but relationships make everything happen.