Was Salesforce’s Acquisition of Slack a Bust?

Angus Loten writing for The Wall Street Journal:

When Salesforce Inc. bought the messaging application Slack for $27.7 billion almost two years ago, it said the marriage would “transform the way everyone works in the all-digital, work-from-anywhere world.” Corporate technology buyers so far aren’t impressed, analysts said.

The acquisition sought to capture the fast-growing market for communications and collaboration software during the Covid-19 pandemic, as employers sent workers home and shifted to remote systems.

Today, companies in the market for customer-relationship management software — Salesforce’s signature product — don’t appear to be swayed one way or another by the addition of messaging and collaboration features, said Liz Herbert, a vice president and principal analyst at information-technology research firm Forrester Research Inc.

“We don’t really see, when it comes to Slack, any pent up demand from Salesforce’s base for a tool like that,” Ms. Herbert said. “It really hasn’t become something compelling,” she said.

I’ll go to the mat arguing that Slack is better-designed and better-implemented than Microsoft Teams. But to make a very broad analogy, I think Slack is to Teams today where Mac OS was to Windows in the mid-1990s: better designed, for sure, but not in a way that makes a difference to the corporate IT decision makers and bean counters who are making the call on which platform to use.

The key is not merely to be better, on some vectors. The key is to be better on the vectors that people with purchasing power care about. Missing this has been the death knell for many good products. One difference between the iPhone and Mac is that the iPhone came of age at the cusp of the “bring your own device to work era”, so factors that appealed to individuals (looks cool, fun to use) outweighed factors that might have swayed traditional corporate IT purchasers (low price, “standards”).

Tuesday, 10 January 2023