WebProNews

Tag: Pandemic

  • Best Buy Lays Off 5,000 Employees, Will Shutter More Stores

    Best Buy Lays Off 5,000 Employees, Will Shutter More Stores

    Best Buy has laid off some 5,000 employees and plans to close additional stores as customers turn to online shopping.

    American customers have increasingly been turning to Amazon and online stores for their electronics needs, putting pressure on traditional, brick and mortar stores. With the pandemic further changing consumers’ shopping habits, traditional stores have been under even more pressure. Fry’s Electronics announced it was closing Wednesday, illustrating the growing challenges traditional businesses are facing.

    Best Buy, in contrast, has fared relatively well during the pandemic. Much of this is due to the company’s online sales. According to CNN Business, the company expects 40% of its sales to come from online purchases in 2021, as opposed to 19% two years ago. The company has also been relatively successful with its physical stores, although it expects in-store business to slow this year.

    As a result, Best Buy has laid off 5,000 staff, mostly full-time employees. The company is also raising the bar for evaluating whether to renew store leases. The company already closed 20 stores a year for the past couple of years, and expects that number to go up this year.

  • President Biden Signs Executive Order to Review Supply Chain

    President Biden Signs Executive Order to Review Supply Chain

    President Biden has signed an executive order authorizing a review of the US supply chain, including semiconductors.

    The US has suffered from a number of major supply chain crises over the last year. At the outset of the pandemic, medical professions struggled with a shortage of PPE. Most recently, multiple industries have been impacted by a shortage of semiconductors. The automotive industry, in particular, has been one of the hardest hit.

    President Biden’s executive order is not a short-term solution, but is an attempt to devise a long-term plan to address the country’s need for semiconductors, pharmaceuticals, rare-earth elements and large-capacity batteries.

    “And the bottom line is simple: The American people should never face shortages in the goods and services they rely on, whether that’s their car or their prescription medicines or the food at the local grocery store,” said President Biden when announcing the executive order.

    The supply chain review will also help pave the way for additional jobs, as well as secure existing ones, by ensuring workers have the critical supplies they need. For example, the semiconductor shortage recently halted production at three GM plants. Ensuring a safe supply of critical components will keep companies and entire industries running.

    “This is about making sure the United States can meet every challenge we face in this new era — pandemics, but also in defense, cybersecurity, climate change, and so much more,” continued President Biden. “And the best way to do that is by protecting and sharpening America’s competitive edge by investing here at home. As I’ve said from the beginning, while I was running: We’re going to invest in America. We’re going to invest in American workers. And then we can be in a much better position to even compete beyond what we’re doing now.

    “Resilient, diverse, and secure supply chains are going to help revitalize our domestic manufacturing capacity and create good-paying jobs, not $15 an hour — which is what we need to do someday. And sooner is better, in my view. But jobs that are at the prevailing wage.”

  • Homeland Security Investing Fake N95 Mask Scam

    Homeland Security Investing Fake N95 Mask Scam

    As if the pandemic is not bad enough, the Department of Homeland Security (DHS) is investigating a scam involving fake N95 masks.

    Effective masks are one of the principle ways to combat the coronavirus and prevent its spread. While important for the population at large, masks are especially vital for front-line health workers who are exposed to the virus on a daily basis. N95 masks are particularly important to health workers, as they provide a higher level of protection than a basic face mask.

    Unfortunately, companies are selling counterfeit N95 masks to hospitals and frontline workers. The counterfeits, purporting to be 3M masks, are becoming more difficult to detect, putting health and frontline workers at risk.

    “They’re not coming from authorized distributors,” said Kevin Rhodes, 3M’s vice president and deputy general counsel, according to the Associated Press. “They’re coming from companies really just coming into existence.”

    “These products are not tested to see if they make the N95 standards,” Rhodes added “They’re not interested in testing them. They’re interested in making as many as they can as cheaply as possible.”

    To help combat the counterfeits, 3M has published guidelines to help individuals and companies identify fakes.

  • Nissan Takes Remote Work to New Heights With Office Pod Caravan

    Nissan Takes Remote Work to New Heights With Office Pod Caravan

    Nissan may have unveiled the most unique remote work concept yet, the NV350, an Office Pod Concept camper van.

    If the idea of sitting at the kitchen table or home office day in and day out seems boring, the NV350 Caravan may be the answer. Nissan’s Office Pod Concept is a caravan with a retractable office space loaded in the back, that can be extended using a smartphone.

    NV350 Interior
    NV350 Interior

    The idea is to provide a truly mobile office, complete with desk, Herman Miller Cosm office chair, edge lighting and polycarbonate floor, not to mention a rooftop deck for relaxation.

    NV350 Roof Deck
    NV350 Roof Deck

    The NV350 has features specifically designed to help people deal with the pandemic, such as a glove box with an antibacterial UV lamp, as well as a DC/AC inverter to power any electrical devices.

    It remains to be seen if the NV350 will be successful, or even see the light of day. Either way, it’s certainly an interesting concept that reflects just how much work has changed as a result of the pandemic.

    https://youtu.be/qSyMUr7cRXg

  • Verizon Commits $10 Million to Help One Million Small Businesses

    Verizon Commits $10 Million to Help One Million Small Businesses

    Verizon has announced it is committing $10 million to help up to one million small business through grants.

    Small businesses have born the brunt of the coronavirus pandemic. Without the deep pockets and resilience of large companies, many small businesses have had to shut their doors. This is especially true of brick-and-mortar businesses that have been heavily impacted by stay-at-home orders.

    Verizon is working to help offset the challenges small businesses are facing, committing $10 million in grants through LISC, a national nonprofit organization.

    “For small business owners today, we know that opening a digital front door is as important as a physical one,” said Tami Erwin, CEO of Verizon Business. “This multi-year effort underscores the role financial assistance, technology and training will play in rebuilding small businesses for both short-term and long-term economic recovery.”

    The company is using Super Bowl LV as its kick-off event, with The Big Concert for Small Business after the game. The event will be hosted by Tiffany Haddish, and feature Alicia Keys, Brandi Carlile, Brittany Howard, Christina Aguilera, Eric Church, H.E.R., Jazmine Sullivan, Luke Bryan and Miley Cyrus. The concert will be live-streamed on Twitch, Yahoo, YouTube, as well as broadcast on several networks.

    “Small businesses are so important and we need to do whatever we can to keep them alive; our communities can’t recover without them,” said Alicia Keys. “I’m excited to be partnering with Verizon and the rest of these amazing artists to not only be able to take the stage and bring that good music and light but to do it for such a meaningful cause.”

  • Semiconductor Shortage Halts Production at Three GM Plants

    Semiconductor Shortage Halts Production at Three GM Plants

    General Motors has announced it is stopping production at three of its plants due to a shortage of semiconductors, and cutting production at a fourth.

    “Semiconductor supply for the global auto industry remains very fluid. Our supply chain organization is working closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impacts on GM. Despite our mitigation efforts, the semiconductor shortage will impact GM production in 2021. We are currently assessing the overall impact, but our focus is to keep producing our most in-demand products – including full-size trucks and SUVs and Corvettes – for our customers. However, we can confirm that the following GM assembly plants will take downtime on all shifts the week of Monday, Feb. 8:

    • Fairfax (Kansas)
    • CAMI (Ingersoll, Ontario)
    • San Luis Potosi (Mexico)”

    In addition, the company said its Bupyeong 2 will operate at half capacity beginning February 8.

    The semiconductor shortage is another effect of the global pandemic. As individuals — and especially gamers — are stuck at home, the demand for semiconductors has skyrocketed. Apple and Microsoft have both reported spectacular quarters, driven in large part from increased demand for personal computers and tablets.

  • Facebook’s Ireland Content Moderators Demand Remote Work

    Facebook’s Ireland Content Moderators Demand Remote Work

    Facebook is facing backlash from workers in Ireland, as they demand the right to work from home amid the pandemic.

    Like many companies, Facebook pushed back its return-to-office date as the pandemic drags on, allowing employees to work from home until July 2021. Unfortunately, that doesn’t seem to apply to content moderators that are working as contractors via a third-party.

    Subcontractors for Dublin-based CPL claim Facebook has forced them to return to the office, even as Ireland is in the midst of a level five lockdown, according to The Verge. Level five means that nonessential retail is closed and household visits are forbidden.

    The contractors have taken their complaint to Deputy Prime Minister Leo Varadkar, who has agreed to contact both Facebook and Covalen, a CPL subsidiary.

    “They’ve made it abundantly clear that our health & safety and lives don’t matter to them,” said Paria Moshfeghi, a Facebook content moderator. “They’re forcing us into the office, putting us and our families at risk of COVID-19, even though our colleagues keep getting COVID. Facebook employees working on the similar content as us are safe and allowed to work from home. Why aren’t we?”

  • Just 11% of Companies Expect All Staff to Return to the Office

    Just 11% of Companies Expect All Staff to Return to the Office

    A new report sheds more light on the state of remote working, suggesting permanent adoption may be more widespread.

    According to a report by the National Association for Business Economics’ (NABE), only 11% of those surveyed expect all of their employees to return to the office once the pandemic is over.

    The NABE’s report echoes research from other organizations that shows a permanent disruption occurring in the workforce. One recent report showed that 50% of workers would give up vacation days to continue working remotely, while another showed that as many as 29% would quit instead of return to the office.

    Obviously, some industries are more flexible than others, with the NABE’s report showing that companies in the services industry were most likely to want a full return to the office.

    Either way, the pandemic has forced companies and workers alike to rethink their work/life balance, and it seems likely that flexibility will continue to be an important factor long after the pandemic is over.

  • Google Cloud’s Business Is Taking Off

    Google Cloud’s Business Is Taking Off

    Google Cloud is back to business as normal, and focused on growth, following an initial slowdown as a result of the pandemic.

    Like many companies, Google had to find its footing when the pandemic first hit. Most industries, including tech, experienced a brief pullback before businesses started returning to normal.

    According to Business Insider, Google Cloud’s business is booming again, with the company hiring aggressively and selling its services, after initially focusing on helping customers survive the downturn.

    “Nothing has stopped because of the pandemic,” an employee told BI. “This is one of the strategies where we can see companies like [Amazon Web Services] and Google have the leverage to take in that pressure to accelerate. They reap the benefits much higher than everyone else. They’re going full force.”

    Google Cloud CEO Thomas Kurian has made no secret of his desire to move the company from third place in the cloud market to at least second place within five years. It appears the company is firing on all cylinders in its efforts to reach that goal after a difficult year.

  • 50% of Workers Would Choose Remote Work Over Vacation

    50% of Workers Would Choose Remote Work Over Vacation

    In further evidence of the rising popularity of remote work, a new poll shows that over 50% of workers would choose remote work over vacation.

    Office Depot conducted a survey of professionals to better understand the state of the remote workforce. Interestingly, while just under a third of workers were working remotely in March 2020, that number had increased to nearly 70% by May.

    While some workers prefer being in the office, it seems the majority not only prefer telecommuting, but would even go to extreme measures to keep doing it. In fact, only 25.2% percent of workers prefer to go back to the office. 50.2% prefer to keep working remotely, while 24.6% would like a mix of both.

    Most telling, however, is that 51.2% would even be willing to forgo vacation days in exchange for remote work.

    Office Depot’s poll is among a growing number of indicators of just how successful and accepted remote work has become, such as one showing that 29% of workers would quit their jobs before returning to the office.

    It’s clear that employers looking to attract the best and brightest will need to ensure some form of remote work as one of their standard benefits.

  • Amazon Offers Support For President Biden’s Vaccination Plans

    Amazon Offers Support For President Biden’s Vaccination Plans

    Amazon has congratulated President Biden and Vice President Harris on their inauguration and offered its support in ramping up the vaccine rollout.

    One of President Biden’s biggest challenges will be significantly increase the pace of the country’s vaccination efforts. In an open letter, Amazon’s Dave Clark, CEO, Worldwide Consumer, made it clear the company is ready to assist.

    We have an agreement in place with a licensed third-party occupational health care provider to administer vaccines on-site at our Amazon facilities. We are prepared to move quickly once vaccines are available. Additionally, we are prepared to leverage our operations, information technology, and communications capabilities and expertise to assist your administration’s vaccination efforts. Our scale allows us to make a meaningful impact immediately in the fight against COVID-19, and we stand ready to assist you in this effort.

    Clark also makes the case that Amazon’s workers, many of whom are considered essential workers, should be among the first vaccinated.

    There is no word yet on whether the new administration will take Clack up on the offer, but it’s a safe bet no options are off the table.

  • Fund Manager: Tech Not Headed For Crash, COVID Setting Up Growth Trends

    Fund Manager: Tech Not Headed For Crash, COVID Setting Up Growth Trends

    Tech stocks may be riding on record highs, with sky-high valuations, but investors shouldn’t fear another Dotcom Bubble crash, according to Terry Smith.

    Terry Smith is a well-known fund manager in the UK, and has been called “the new Warren Buffet.” Smith’s fund is heavily invested in tech stocks, leading to some concern that he’s vulnerable to another Dotcom Bubble crash. In a letter to investors (PDF), Smith addresses those concerns and explains why he doesn’t believe tech stocks are in jeopardy.

    One of the biggest factors Smith points to is how differently tech stocks, which often have intangible factors, must be evaluated. In so doing, he points out an inherent advantage of tech companies, whose trade is more often than not in information and intellectual capital.

    The main assets of the companies we seek to invest in are often intangible. Some examples of intangible assets are brands, copyrights, patents, know-how, installed bases of equipment which require servicing and maintenance and so produce customers who are locked-in to the supplier, software systems which are critical to a business or person and so-called network effects. They are distinct from tangible assets such as real estate, machinery and equipment, and vehicles.

    The return on intangible assets is higher as they mostly need to be funded with equity not debt and attract an appropriate return. Lenders seem to crave the often false security of lending against tangible collateral. Intangible assets can also last indefinitely if they are well maintained by advertising, marketing, innovation and product development and the duration of an asset is an important factor in figuring out its real returns.

    Interestingly, Smith also makes the case that COVID is setting up for some specific growth trends. Like many, he likens the current pandemic to the Spanish Flu, and draws a comparison to Henry Ford and the Model T.

    The assembly line was not invented as a result of the Spanish Flu pandemic — the Model T Ford was put on an assembly line in 1913 — but it accelerated its adoption.

    The increase in productivity this delivered helped to fuel an economic boom as the cost of production of items such as cars and household electrical appliances were reduced as the volume of production rose so that they became affordable by the middle classes for the first time. This helped to fuel the economic and stock market boom of the Roaring Twenties.

    Smith sees the possibility of something similar happening post-COVID as a result of remote work and digital communication becoming normalized. Salesmen will be able to meet with more clients virtually than they could in person, businesses will see reduced costs, factories will be able to maintain production despite using less staff and more.

    Obviously, as he points out, it’s not good news for all industries.

    Of course not all businesses benefit from these developments. The airline industry, hospitality, bricks & mortar retailing and office property may all have some very difficult problems to face, just as you wouldn’t have wanted to have been a saddler when Henry Ford and his competitors hit their stride.

    This analogy helps explain why Smith’s fund is so heavily invested in tech and why he’s not worried about a possible crash. Of course, as he humorously points out, no one’s predictions are perfect.

    I will leave you with this thought: What are the similarities between a forecaster and a one-eyed javelin thrower? Answer: Neither is likely to be very accurate but they are typically good at keeping the attention of the audience.

  • Smartwatches Can Serve As Early Coronavirus Detection

    Smartwatches Can Serve As Early Coronavirus Detection

    Smartwatches can do much more than count steps, with research showing they can detect coronavirus infections days before diagnosis.

    One of the keys to combatting coronavirus is early detection and diagnosis. The faster someone is diagnosed, the faster they can be quarantined and the less likely they are to spread the virus to others. Adequate testing has long been a major problem, making it difficult to get the pandemic under control. Adding to the challenge is COVID-19’s long incubation period, as well as the fact that patients can transmit the disease before they are visibly symptomatic.

    According to CBS News, researchers at Mount Sinai Health System in New York and Stanford University in California have shown that wearable devices — such as the Apple Watch, Fitbit and Garmin — can detect coronavirus before symptoms appear and even before tests can detect it.

    The key is in detecting minute changes in a wearer’s heart rate, skin temperature and other physiological markers. In particular, heart rate variability is a key factor. Heart rate variability measures the time between heartbeats, and is impacted by the state of a person’s immune system.

    “We already knew that heart rate variability markers change as inflammation develops in the body, and Covid is an incredibly inflammatory event,” Rob Hirten, assistant professor of medicine at the Icahn School of Medicine at Mount Sinai told CBS MoneyWatch. “It allows us to predict that people are infected before they know it.”

    The findings could be another important step in the fight against the coronavirus pandemic, and will likely lead to a jump in wearables demand.

  • Microsoft Azure and AWS Big Cloud Winners Amid Pandemic

    Microsoft Azure and AWS Big Cloud Winners Amid Pandemic

    As the global pandemic has accelerated cloud adoption, Microsoft Azure and AWS have emerged as the clear winners.

    Flexera has released its 2021 State of Tech Spend Report. As expected, digital transformation and cloud adoption are on the rise. Some 56% of respondents said digital transformation was a top initiative for 2021, as opposed to 54% in 2020. Cloud adoption saw even greater jump, with 48% of respondents making it a top priority in 2021, vs 40% in 2020. Not surprisingly, work from home was the single biggest driver for change, with 74% citing it as the leading factor.

    Of the cloud providers, Microsoft Azure and AWS were the clear winners. Some 61% of respondents said they were going to increase spending on Microsoft Azure in 2021. Similarly, 57% plan on increasing their spending on Microsoft SaaS, while 54% plan on spending more on AWS. Google appears set for more modest gains, with only 31% planning on increased spending on Google Cloud.

    The forecast looks even worse for IBM and Oracle. Respondents plan on increasing their spending on IBM Cloud a mere 16%, with 14% planning to decrease spending. While 20% said they planned on increasing spending on Oracle Infrastructure Cloud, 13% plan on decreased spending. The outlook is even worse for Oracle Licensed Software, with 22% planning to increase spending, as opposed to 25% planning to decrease expenditures.

    Flexera’s report is an important look into the cloud industry and the ongoing digital transformation, and is even better news for Microsoft and AWS.

  • Facebook On Target For 50% Market Penetration Latin America

    Facebook On Target For 50% Market Penetration Latin America

    Facebook’s growth may have slowed in recent years, but the pandemic is driving it to new heights in Latin America.

    As Facebook has achieved market saturation in many parts of the world, its growth has naturally slowed. As Business Insider points out, however, the pandemic has been a significant growth factor for Facebook, especially in Latin America.

    “In Latin America specifically, we now expect the number of Facebook users to grow by 8.8% in 2020 to 339.5 million, up from 7.3% in 2019 and more than triple the growth we originally expected for this year (2.8%),” writes BI’s Daniel Carnahan. “And for the first time, Facebook’s penetration in Latin America will reach over half of the population, at 53%.”

    It remains to be seen if Facebook can sustain its growth rate, and seems likely it will not once things return to normal. Nonetheless, its growth rate in Latin America is good news at a time when the company is under siege from multiple angles.

  • App Stores See Massive Sales Over Holidays

    App Stores See Massive Sales Over Holidays

    Apple’s App Store and Google’s Play Store saw massive gains over the Christmas holiday as people stayed at home.

    As the coronavirus pandemic has hit record levels, health experts urged people to stay at home and cancel their holiday plans. While some refused to do so, many did change their plans. As a result, people looked elsewhere for entertainment and distraction, specifically to app stores.

    According to Sensor Tower’s estimates, people spent a shopping $407.6 million on the App Store and Play Store on Christmas. This represents a 34.5% year-over-year (YoY) growth from 2019.

    The biggest category was games, which grew 27% YoY, representing $295.6 million. Aside from games, Entertainment was the biggest category, with $19.3 million being spent on the App Store and $4.3 million on the Play Store.

    Sensor Tower’s figures are just the last example of the digital transformation currently underway, accelerated by the global pandemic.

  • Amazon Delivers 1.5 Billion Products During Holiday Season

    Amazon Delivers 1.5 Billion Products During Holiday Season

    Amazon has reported a record-breaking holiday season, shipping some 1.5 billion products.

    Consumer purchasing has underwent major transformation as a result of the pandemic. Record numbers of individuals turned to online shopping to avoid crowds and practice social distancing.

    Amazon was one of the biggest beneficiaries of this transformation, as customers turned in droves to the online giant. The company delivered some 1.5 billion electronics, toys, home products, beauty and personal care products during the holidays.

    In addition, third-party sellers saw a 50% growth in sales, compared to 2019. Small and medium-sized businesses sold almost 1 billion products via Amazon.

    The company’s growth also resulted in hundreds of thousands of new jobs, with the company adding some 400,000 full and part-time jobs in 2020. The company also spent over “$2.5 billion in bonus pay to front-line workers,” as well as donated millions of items during the holiday season.

    “Amazonians around the world have truly shown what it means to be customer-centric and support our communities this year,” said Jeff Wilke, CEO Worldwide Consumer at Amazon. “When our customers—including healthcare workers on the front lines—most needed essential supplies, our teams and partners went above and beyond to stock and deliver those items. When it became clear that COVID-19 testing was going to be important, Amazonians across the company moved quickly to build our own testing capacity so we could help protect employees and deliver products to customers. And when customers needed a little extra holiday cheer, millions of employees and partners worked together to deliver more savings and holiday gifts than ever before. We couldn’t be prouder of, or more thankful for, our teams around the world.”

    Given the success of online shopping this year, and especially this holiday season, it’s a safe bet shopping is forever changed.

  • Apple Extends Remote Work, Committed to In-Person Collaboration

    Apple Extends Remote Work, Committed to In-Person Collaboration

    Apple has extended its remote work deadline, with most employees not expected back in the office until June 2021.

    Apple, perhaps more than many companies, is known for its face-to-face collaboration. Steve Jobs famously helped rebuild a culture of face-to-face collaboration at Apple, built on teams brainstorming and building on ideas together.

    Despite its culture, like many companies, Apple sent employees home to work remotely as a result of the pandemic. According to Bloomberg, Apple has now pushed back the timeframe when employees will be expected back in the office to June of 2021, with CEO Tim Cook saying it “seems likely” employees will not return before then.

    At the same time, there is little hope Apple will embrace a fully remote option as some other companies, such as Twitter, have done. Cook made it clear he firmly believes in the face-to-face collaboration that has been one of the foundations of Apple’s success.

    “There’s no replacement for face-to-face collaboration, but we have also learned a great deal about how we can get our work done outside of the office without sacrificing productivity or results,” Cook told staff, according to Bloomberg’s sources. “All of these learnings are important. When we’re on the other side of this pandemic, we will preserve everything that is great about Apple while incorporating the best of our transformations this year.”

    There does appear to be a glimmer of hope for employees looking for more flexibility, however. The fact that Cook said the company will incorporate “the best of our transformations this year,” would seem to indicate the company is open to some flexibility — perhaps along the lines of the approach Google is taking — even if it’s not a fully remote option.

  • Zoom the Most Downloaded iOS App of 2020

    Zoom the Most Downloaded iOS App of 2020

    Apple has released its yearly report of the most popular apps and, to no one’s surprise, Zoom was the most popular iOS app in 2020.

    Few apps have become synonymous with the pandemic as much as Zoom. As employees went home to work remotely, Zoom quickly rose to become one of the most common choices. It has also enjoyed wide use among schools, colleges and churches, as well as individuals and families looking to socialize virtually.

    As a result, Zoom quickly skyrocketed from 10 million daily users to 300 million. The company has also repeatedly beat analyst estimates for its quarterly earnings.

    Apple’s report is just the latest indication that Zoom is the company to beat among pandemic-fueled communication platforms.

  • Deliveroo CEO: COVID Has Accelerated Food Delivery Adoption by 2 to 3 Years

    Deliveroo CEO: COVID Has Accelerated Food Delivery Adoption by 2 to 3 Years

    While many businesses are struggling as a result of the COVID-19 pandemic, the food delivery industry is booming.

    Deliveroo is a London-based food delivery service that operates in a number of European and Middle Eastern countries, as well as Australia, New Zealand, Hong Kong and Singapore. According to CNBC, Deliveroo’s Founder and CEO Will Shu told the Web Summit conference how COVID-19 has transformed the industry:

    Our initial analysis suggests that Covid-19 has accelerated consumer adoption of these delivery services by about two to three years.

    That, in turn, as been good for Deliveroo’s business:

    We saw this incredible increase in new customers joining the platform. We also saw our existing customers looking to order more often, also ordering for the family more frequently, we saw average basket sizes increase, and also ordering a wider range of products.

    Shu’s statement is an indication of the deep-seated changes occurring in business, as well as society at large, as a result of the pandemic.

  • Salesforce Plus Slack Equals a Battle Over the Cloud

    Salesforce Plus Slack Equals a Battle Over the Cloud

    Salesforce announced its much-anticipated acquisition of Slack earlier today, sparking nothing short of a battle over the cloud.

    Salesforce made headlines last week when news broke that it was looking to acquire Slack. Talks progressed rapidly, with the deal announced a few hours ago. In the statement announcing the deal, Stewart Butterfield, Slack’s CEO and Co-Founder, provided a clue about what’s at stake:

    Salesforce started the cloud revolution, and two decades later, we are still tapping into all the possibilities it offers to transform the way we work. The opportunity we see together is massive.

    Despite being responsible for starting the cloud revolution, Salesforce has come under increasing pressure from other companies, most notably Microsoft. The Redmond company has made no bones about its intention to unseat Salesforce as the dominant CRM company. Most recently, Microsoft partnered with C3.ai and Adobe to roll out an AI-based CRM.

    Similarly, Slack has been under increased pressure from Microsoft Teams. Teams doubled Slacks installed user base in November 2019 when it reached 20 million daily users. Its user base has exploded since then, reaching 115 million in October. Much of Teams’ growth has been the result of Microsoft’s bundling it with Office, a practice that prompted Slack to file an antitrust complaint with the EU.

    Butterfield’s comment about “the opportunity we see together is massive” is indicative of just how much both companies need this merger. Since its IPO, Slack has never turned a profit. To make matters worse, Slack has not experienced the same pandemic-fueled boon like Zoom and other cloud platforms. It’s experienced significant growth to be sure, but not to the same degree as competing companies.

    The combination of the two companies will help both fight Microsoft.

    “The core reason for this deal in our opinion is to keep pace with the cloud behemoth in Redmond,” Wedbush analyst Dan Ives said in a note to investors Tuesday, reports CNN. “Slack despite facing stiff competition from Microsoft has been a clearly successful solution set further penetrating enterprises and thus looks like the natural fit for Salesforce to beef up its collaboration and messaging footprint and keep pace with [Microsoft].”

    It remains to be seen if the two companies will be more effective together, but it’s a good start. The combination of the two platforms helps both provide a more complete offering to its customers.