Marc Benioff has made clear he wants to re-recruit top executives that have departed Salesforce in recent weeks.
Salesforce has had a rough few weeks, with co-CEO Bret Taylor and Slack CEO Stewart Butterfield leaving, among others. The departures have sparked speculation about what is happening behind the scenes.
According to Business Insider, Salesforce CEO Marc Benioff attempted to put the issue to rest during a company all-hands call, making it clear he has no hard feelings about the execs’ departure and would like them back.
“Some people come in, some people leave, it’s sad when they go, and it’s great when they come in — it’s a bigger story of life itself,” Benioff said. “I will support them when they are leaving and I will recruit them back.”
“Everyone deserves to be able to manifest and achieve their own self-actualization to live the life they want and do what makes you happiest, to do what makes you healthiest, to do what is necessary for you to have loving relationships with your family, your friends, to be successful with your work and have impact on the world,” Benioff added to employees. “If you can do that at Salesforce, we’re going to do everything we can to make that for you, and if you have to leave, we will support you, but we will recruit you back.”
Slack founder and CEO Stewart Butterfield has announced his departure from Salesforce, effective January 2023.
Stewart Butterfield founded Slack, with its initial release in 2013. The company quickly went on to become a dominant force in corporate messaging, ultimately being acquired by Salesforce for $27.7 billion in mid-2021.
Barely over a year later, Butterfield has announced he is leaving Salesforce, according to an internal Slack message seen by Business Insider. The executive made clear his departure has nothing to do with Salesforce co-CEO Bret Taylor leaving the company.
“FWIW: This has nothing to do with Bret’s departure. Planning has been in the works for several months! Just weird timing,” Butterfield wrote.
Lidiane Jones has been tapped as Slack’s next CEO, a decision Butterfield had a hand in.
“Stewart is an incredible leader who created an amazing, beloved company in Slack. He has helped lead the successful integration of Slack into Salesforce and today Slack is woven into the Salesforce Customer 360 platform,” a Salesforce spokesperson told Insider, saying Butterfield was “instrumental” in Jones’ selection.
Slack is going all-in on remote work, wanting its executives to lead by example by limiting the amount of time they spend in the office.
Few companies have benefited from the global pandemic, and ensuing shift to remote work, as Slack. The company’s corporate messaging platform quickly became a staple of teams looking to stay connected and productive, despite the physical distance.
After Salesforce purchased Slack, the companies began to emphasize a “digital-first” approach. Salesforce CEO Marc Benioff recently saidemployees “can do their job at home, they can be successful from anywhere,” and said Salesforce was helping customers achieve that.
In an effort to make sure its executives lead by example, Slack CEO Stewart Butterfield told CNN that executives are being encouraged to spend no more than three days a week in the office.
Executives will lead by example. There won’t be any dedicated executive floors in any of our offices, and executives will focus their office time on team events and customer interaction. Our guidance to leaders is to spend fewer than three days per week in the office.
Butterfield framed the policy as part of a goal to build a better workplace.
This is no time for retreat to the comfort of well-worn habits, or meager attempts to accommodate a restive workforce. This is a time for business leaders to build a better workplace and world.
Many companies have made remote and hybrid work a permanent policy, after the pandemic demonstrated that employees can be productive while working remotely. Few, however, have gone as far as Slack in encouraging the adoption of the new paradigm.
Butterfield acknowledged there would be challenges along the way, but expressed confidence it would pay off.
Embracing this digital-first shift won’t happen overnight. But if we’re flexible while we learn, experiment and evolve, we’ll make work simpler, more pleasant and more productive.
Salesforce has completed its $27.7 billion acquisition of Slack, combining the leading CRM platform with one of the leading messaging platforms.
The two companies announced in December they had reached a deal for Salesforce to acquire Slack. The deal was seen as a way for both companies to better compete with Microsoft. Microsoft Teams had eclipsed Slack, in terms of user count, thanks in large part to being part of Microsoft 365. Similarly, Microsoft has made it a goal to topple Salesforce as the leading CRM provider.
The deal underwent additional scrutiny by the DOJ before receiving regulatory approval, paving the way for the deal to close.
Executives from both companies highlighted their intent to create a “digital HQ,” to serve as a way for companies to reinvent their productivity.
“We couldn’t be more excited to have Slack as part of the Salesforce family, combining the #1 CRM and the trailblazing digital platform for the work anywhere world,” said Marc Benioff, Chair and CEO of Salesforce. “Together we’ll define the future of enterprise software, creating the digital HQ that enables every organization to deliver customer and employee success from anywhere.”
“We have a once-in-a-generation opportunity to rethink and reshape how and where we work,” said Stewart Butterfield, Slack CEO and Co-Founder. “Salesforce and Slack are uniquely positioned to lead this historic shift to a digital-first world. I could not be more excited for what’s to come.”
The deal was welcomed by other companies as well.
“We are obsessed with continually delighting our clients, and offering them the best experience and value across every interaction,” said Arvind Krishna, Chairman and CEO of IBM. “Salesforce and Slack coming together will help us become more connected, more productive, and more innovative so we can better serve our clients.”
Slack is the latest company looking to cash in on Clubhouse’s popularity, with plans to include similar features in its own app.
Clubhouse is an audio-chat social media platform that is currently invite-only. The app has experienced a significant surge in popularity, with some of the biggest tech news debuting in Clubhouse chats.
Not surprisingly, major tech companies are wanting to capitalize on Clubhouse’s success by rolling out their own competing apps, or adding its functionality to their existing ones.
Slack appears to be headed for the latter option, according to CEO Stewart Butterfield, who broke the news in a Clubhouse chat, one that included Clubhouse CEO Paul Davison.
“I’ve always believed the ‘good artists copy, great artists steal’ thing, so we’re just building Clubhouse into Slack, essentially,” said Butterfield.
Needless to say, Butterfield being willing to challenge Clubhouse — while in a Clubhouse chat with the Clubhouse CEO — caught people’s attention.
Slack's CEO Stewart Butterfield made a huge announcement:
– On Clubhouse – About building their own Clubhouse into Slack – While Clubhouse's CEO was also a speaker
Starting today, Slack is enabling Connect DM, allowing users to send direct messages to anyone, not just those in their channels.
Connect DMs are an evolution of Connect, Slack’s feature to allow companies to set up cross-organization channels. Connect allows employees from different companies to easily communicate with one another. Connect DM builds on that feature by allowing Slack users to communicate with any other Slack users.
In many ways, the feature is designed to help Slack better compete with Microsoft Teams. Despite being an early leader and pioneer in the field, Slack has been eclipsed by Teams, especially during the pandemic. Late last year, Salesforce announced it was acquiring Slack, in a move widely seen as helping the two companies better compete with Microsoft.
In addition to better competing with Teams, Slack’s Connect DM helps make the service more integral to a company’s communication. Rather than relying on outside services, such as text, iMessage, WhatsApp or others, Connect DM allows users to communicate easily, while still maintaining a record of the communication.
“You could put a link on your Twitter profile or a QR code on your business card that people could use to connect with you,” Slack CEO Stewart Butterfield told The Verge in an interview last October when the feature was first announced.
“It works essentially like BlackBerry messaging, so that link is the equivalent of me giving you my BlackBerry PIN but when you message me I still have to approve you,” says Butterfield.
The new feature should help Slack in its rivalry with Teams, and eliminate a major pain point for its users.
“There is definitely no intention to make Slack free,” says Slack CEO Stewart Butterfield. “What we’ve seen in the last little while is the biggest telco in North America is wall-to-wall on Slack. The operator of the largest integrated health care system in the United States is on Slack. The single largest government contractor in the United States is wall-to-wall on Slack.”
Slack Connect Key To Value Unlock Of Salesforce Deal
The simple version of the back story is this is a really unique combination. We believe we can accomplish in the next five years what might have taken us 20 years to do otherwise. That’s the heart of it and it’s a pretty big milestone for us. We’re excited. It wasn’t expected by the outside world but we have a lot of momentum now. We came out of this quarter and we announced our results and Salesforce announced their results. Then we announced the acquisition all at the same time.
A little bit of this got lost but we added 12,000 new paying customers in that quarter. It’s up 140 percent from a year ago. It matches the crazy surge that we saw during the early days of the pandemic. That momentum is coming from product improvements and it’s coming from Slack Connect which allows two organizations to communicate across organizational boundaries. That’s actually going to be key to the value unlock over the next few years. Salesforce is all about CRM. It’s all about customers and Slack Connect is 95 percent customer-vendor relationships.
Engagement Layer: Everyone Will See It Later
This (acquisition) is 100% offense. There are some really unique aspects of this particular combination. We weren’t looking to sell the company. I have a great relationship with Brett Taylor, President, and COO of Salesforce. We’ve known each other for a couple of decades at this point. There’s a way in which we see the world that i think very few people see it today but everyone will see it later. One way to say that is to look at the engagement layer. That’s kind of a weird term but it is the place where the conversations are happening, the places where the decisions are being made, as the perfect place to bring together workflows across organizational boundaries.
Salesforce has a really broad suite. But of course, we have 2,400 apps in the app directory for Slack. We have 700 000 custom integrations that were developed by customers. These are like unique little integrations, some of them very small, just sending notifications into Slack, and some of them are sophisticated workflows that run entire businesses. That’s something that we will see an increasing degree of sophistication in the messaging environment and an increasing degree of work getting done directly where the decisions are made.
No Intention To Make Slack Free
When Brett and I were talking we talked about the opportunity for something that’s one plus one equals seven. If you think back to the 90s and Cisco acquiring small hardware startups and then plugging it into their network of 20,000 salespeople and just selling a lot more of that thing. That’s not it. We will do that as well. We obviously have incredible distribution and incredible reach and incredible relationships across all industries and across all geographies. So we’ll sell more Slack.
Salesforce recently announced their plan to get to $50 billion in revenue and we’ll play an important part in that. We’ll also be an accelerant for the adoption of Salesforce’s core products. There is definitely no intention to make Slack free. What we’ve seen in the last little while is the biggest telco in North America is wall-to-wall on Slack. The operator of the largest integrated health care system in the United States is on Slack. The single largest government contractor in the United States is wall-to-wall on Slack.
We win in media and technology, kind of famously, but we also win in retail and apparel and industries that people don’t imagine seeing us. We have 142,000 customers right now. There’s going to be a lot of overlap with Salesforce but there’s also going to be 100,000 plus of those customers which are SMBs and kind of outside of Salesforce’s purview so far. We think there’s the opportunity to bring them into the fold and to connect them all together with Slack Connect.
Slack CEO Stewart Butterfield: No Intention To Make Slack Free
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.
Salesforce announced that it is buying Slack for $27.7 billion in cash and stock. The company says that combining Slack with Salesforce Customer 360 will be transformative for customers and the industry. They say that the combination will create the operating system for the new way to work, uniquely enabling companies to grow and succeed in the all-digital world.
Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce’s common stock on November 30, 2020.
The transaction is anticipated to close in the second quarter of Salesforce’s fiscal year 2022, subject to approval by the Slack stockholders, the receipt of required regulatory approvals and other customary closing conditions.
Slack CEO Stewart Butterfield told the Wall Street Journal that he is joining Salesforce and will continue to run Slack as a unit of Salesforce after the deal’s close.
“Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it,” said Marc Benioff, Chair and CEO, Salesforce. “This is a match made in heaven. Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world. I’m thrilled to welcome Slack to the Salesforce Ohana once the transaction closes.”
“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,” said Stewart Butterfield, Slack CEO and Co-Founder. “As software plays a more and more critical role in the performance of every organization, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility. Personally, I believe this is the most strategic combination in the history of software, and I can’t wait to get going.”
Slack to Become the New Interface for Salesforce Customer 360
Salesforce:
Salesforce is the #1 CRM that enables companies to sell, service, market and conduct commerce, from anywhere. Slack brings people, data and tools together so teams can collaborate and get work done, from anywhere. Slack Connect extends the benefits of Slack to enable communication and collaboration between a company’s employees and all its external partners, from vendors to customers.
Slack will be deeply integrated into every Salesforce Cloud. As the new interface for Salesforce Customer 360, Slack will transform how people communicate, collaborate and take action on customer information across Salesforce as well as information from all of their other business apps and systems to be more productive, make smarter, faster decisions and create connected customer experiences.
“It’s been a funny journey working remotely,” says Box CEO Aaron Levie. “A month or two into the pandemic I distinctly remembered that we actually started our company completely remotely. The move to this remote work style is causing us to realize how different managing and leading businesses and executing can be if we were able to take advantage of virtual technology more even when we go back to the office. This completely opens up a new way of working.”
Aaron Levie, co-founder and CEO of Box, discusses at the CNBC @Work Summit how remote working that was forced upon companies has actually opened them up to a completely new way of working:
It’s Been A Funny Journey Working Remotely
It’s been a funny journey working remotely. A month or two into the pandemic I actually distinctly remembered that wait a second, we actually started our company completely remotely. My co-founder and I were going to two different colleges at the time and so the whole business was run over instant messaging. Before we had Slack we had AOL Instant Messenger. Before we had Okta we had really bad passwords. We were a remote company and we started our own product because we wanted to make it so people could easily access and share files from anywhere. That was the origin of the business.
Fast forward 15 years later, we have 2,000 employees, we work in offices, we have a lot of the standard ways you think about when scaling up the company. When we had to instantly move to a remote and distributed way of working it really hit me how much of the work style that gets embedded into our companies are really actually things that just carried forward from the 20th Century when everything was analog and everything was done in person. All communication was done between people either through written communication or just a meeting.
Pandemic Opened Up New Way Of Working
You realize that when you go virtual and you go remote there is actually so much potential to be able to work in a digital-first way. When you think about a team meeting as an example, so many of our meetings are arbitrarily sized to the number of people that fit into a conference room. So it’s kind of bizarre that work just happens to be the six to twelve people that can fit into a conference room space. Certainly for software projects or a particular team that’s a pretty good logical size. But that’s not the right size that contributes to a brainstorm. That’s not inherently the right size of people that you want when you’re communicating information and getting the best ideas around how to go drive the business.
So having that Slack channel with 150 people in it that cuts across different parts of the organization we are able to get contributions from people that would have never been in that conference room previously. That completely opens up a new way of working. Think of what you now do on video and the ability to include voices and ideas from people that previously wouldn’t have spoken up or wouldn’t have had an easy opportunity to contribute to some particular part of the business or strategy or have a two-way dialogue on a really important business topic.
Real Potential That We Want To Continue
We had a meeting with all of our top 200 leaders in the company last week and that was a complete bidirectional discussion in a way that would never have been possible in person. That’s usually a person with a microphone just communicating outward to everybody in the business and not actually having it be a dialogue to get feedback. The move to this remote work style is causing us to realize actually how different management and leading businesses and executing can be if we were able to take advantage of virtual technology more even when we go back to the office.
None of this requires you to be remote it’s just sort of the remote that was forced upon all of us to the point that we are now realizing that there is actually some real potential here that we want to continue to maintain going forward.
Slack has scored another major win, as Amazon Web Services (AWS) has adopted the messaging platform for all its employees.
The deal is part of a collaboration between the two companies, with Slack continuing to use AWS as its preferred cloud provider. Meanwhile, AWS will deploy Slack to all its employees to help teams communicate more efficiently.
As part of Slack’s ongoing reliance on AWS, the platform will migrate to Amazon’s Chime voice and video calling service to power Slack Calls. The company assures customers they will not notice any difference in the short-term. In the long-term, using Amazon Chime to power Slack Calls will enable the company to add more features and advanced capabilities.
“The future of enterprise software will be driven by the combination of cloud services and workstream collaboration tools,” says Stewart Butterfield, the co-founder and CEO of Slack. “Strategically partnering with AWS allows both companies to scale to meet demand and deliver enterprise-grade offerings to our customers. By integrating AWS services with Slack’s channel-based messaging platform, we’re helping teams easily and seamlessly manage their cloud infrastructure projects and launch cloud-based services without ever leaving Slack.”
The partnership will likely benefit both companies, with Slack’s customers standing the most to gain.
“In the first 60th percent of this quarter added 9,000 new paid customers,” says Slack CEO Stewart Butterfield. “That’s a net number. This is compared to 5,000 for the previous quarter and 5,000 for the quarter before that. That’s an enormous surge. We’ve also seen the number of messages sent per user up 25 percent. Suddenly people are discovering a lot of techniques that were available to them before that suddenly become mandatory.”
Stewart Butterfield, CEO of Slack, discusses via Zoom on CNBC how the pandemic has doubled their pace of growth:
Customers Added Has Nearly Doubled
You think about what people hope to accomplish out of having a meeting. It’s often to get a decision made. It’s to update people on the status of projects. There’s a whole bunch of reasons to have a meeting. There’s an immediate obvious switch that goes off in people’s heads, hey we used to sit in the same room and now we’re at home, we need to have a videoconference. But the best way to support that work in getting the decision made, getting people on the same page, and knowing where you can ask the question is often better served by other methods. In the case of Slack, that’s channels.
In the first 60th percent of this quarter added 9,000 new paid customers. That’s a net number. This is compared to 5,000 for the previous quarter and 5,000 for the quarter before that. That’s an enormous surge. We’ve also seen the number of messages sent per user up 25 percent. Suddenly people are discovering a lot of techniques that were available to them before that suddenly become mandatory. When the only tools you have to get work done are meetings and email and meetings suddenly become a lot harder to pull off you begin to look for alternatives.
Right Now It Looks Great For Us
We look at what might happen on the small business side (on whether we will see sustained growth). There could be millions of bankruptcies and that will obviously affect us. We have a very healthy small business part of Slack. Enterprises can shut down spending. On the other hand, we’ve seen the surge in sign-ups so obviously people are seeing the need. We also see expansion in existing enterprise customers. It’s very hard to know how those two forces balance each other out.
There are other things to consider too. I’ve been talking to other software CEOs. What do you do when you’re not doing field marketing events to drive new customers? What do you do when your salespeople can’t travel? What do you do when your executive briefing centers are shut? How is that going to manifest in pipeline and growth in 3, 6, 9, 12 months? Right now it looks great for us but it’s impossible to say how this takes out over the year.
Slack CEO Stewart Butterfield: We’ve Seen an Enormous Surge
“Happy Friday the 13th,” says Slack CEO Stewart Butterfield in referencing the coronavirus impact on the stock market. “There are a lot of people who are moving to a remote work or work-from-home situation for the first time. A lot of executives who are struggling to figure out how to manage and maintain operational performance in this kind of environment. They have a lot of questions and a lot of uncertainty. We’ve seen a surge in new teams created and people checking out Slack for the first time.”
Stewart Butterfield, CEO of Slack, discusses on CNBC the historic move to remote work by organisations large and small in response to the coronavirus. Butterfield says that this may have a lingering impact on businesses opting for more remote options and with up-leveling communications:
Slack Coronavirus Response: “This Is Our Moment To Help”
Happy Friday the 13th from the first growth company CEO to have to report into what was a pretty apocalyptic day on the markets. We’re seeing a lot from all different kinds of customers. We have 110,000 customers, SMEs, large enterprise, government, academic, and nonprofit. There are a lot of people who are moving to a remote work or work from home situation for the first time. A lot of executives who are struggling to figure out how to manage and maintain operational performance in this kind of environment. They have a lot of questions and a lot of uncertainty.
The reaction inside the company has been really fantastic. A lot of energy. I think the employees feel like this is our moment to help. We have a great collection of resources at Slack (Slack Remote). We’ve also scaled up a program to give people one-on-one consultations. Our customer success teams are very active with the enterprise customers. We’re running webinars and giving training. In some sense Slack was built for this. Not specifically for remote work but for up-leveling communications and communications is foundational to that way that business operates. In an environment where you’re suddenly making this transition it’s more important than ever.
The Crisis Will Have Some Permanent Impact On Business
I think it will (coronavirus crisis) definitely have some permanent impact. From where we sit today there’s not a lot of visibility into the future. You think about just what it felt like yesterday compared to Wednesday with moments like the Tom Hanks or NBA thing where suddenly the psychology really seems to shift. People start to have a different kind of perception of what the next couple of weeks are going to look like. So looking too far ahead I think is difficult. This will be a lingering factor and have a lasting impact for most organizations.
I got an email from a CTO last week who had just signed a huge contract with Slack, one of the biggest asset managers in the world. What he said is like hey, just letting you know, we just signed but this is the last PO we will sign before the doors kind of shut. I think you’ll see some clamping down on spending. At the same time we’ve seen a real surge in interest both from existing customers and from new customers. We’ve seen a surge in new teams created and people checking out Slack for the first time. It’s really hard to balance those two.
We feel great about (our competition with Microsoft Teams). Microsoft Teams has been out for three years now and enough time has passed. I think that’s the reception that we got on it from the analysts last night. This is our third quarter result report as a public company. One of the wins that were proudest of in the last quarter was with Veterans Affairs going to 20,000 users. They run the biggest integrated healthcare system in the United States. You think about the pressure that they’re going to be under with a lot of elderly patients and managing through that kind of crisis. This is in an environment where you’re having people work from home in an environment that’s so dynamic.
Leaders Need To Drive Alignment and Agility
I think about my own experience. Stuff is changing every day. We have 1,300 employees in San Francisco. Just last night school districts said that they’re shutting down all the schools. So people who are already in a situation where they were battling over kitchen table space with their spouse when they’re both working from home and now they are going to have two or three kids in the house as well. That’s not an easy situation to manage.
Meanwhile the disruptions of supply chains to the SMEs, restaurants shutting down, travel, that’s going to have downstream impact. It’s such a dynamic environment. Anything that leaders can do and employees can do to help drive kind of alignment and ultimately agility, because they’re in this kind of environment you need to be agile and you need to be responsive.
Slack Helping Companies With Historic (Coronavirus) Shift To Remote Work
In a big win for Slack, Business Insider (BI) is reporting that IBM is deploying the messaging app to all of its 350,000 employees.
Slack is locked in a rivalry with Microsoft Teams, with the two companies battling for the corporate messaging market. Microsoft Teams recently doubled Slack’s user base, and has kept the pressure up with TV ads. In spite of Microsoft’s momentum, however, IBM has chosen Slack as its messaging app of choice. This, in turn, helps Slack make the case that it can compete with Microsoft on the largest scale, in the most mission-critical environments.
“Going wall to wall in IBM — it’s basically the maximum scale that there is, so we now know that Slack will work for literally the largest organizations in the world,” Slack CEO Stewart Butterfield told BI.
Konrad Lagarde, director of IBM Toolbox, told BI that one of the reasons IBM went with Slack was their willingness to meet IBM’s needs. When Lagarde first starting using the app, teams were limited to 2,000 individuals. With some departments larger than that, IBM needed an app that could scale better and Slack was willing to add the necessary features.
IBM also likely chose Slack over Microsoft Teams as a result of increasing competition between the two computing giants. Microsoft is second in the U.S. cloud market, and IBM has increasingly staked its future on moving into the cloud. In fact, IBM’s recent earnings were buoyed by its cloud business. Just as many retail companies are turning to Microsoft rather than relying their prime competitor Amazon, IBM probably wants to avoid relying on a company it directly competes with.
Either way, today’s announcement is good news for Slack and will likely help the company continue to attract business, both large and small.
“Whatever Microsoft does we’re still going to do the same thing that we would do for customers,” says Slack CEO Stewart Butterfield. “If the performance of our applications, like the number of milliseconds it takes to startup, is an important thing for customers, we will do that. If shared channels are an important feature we will develop shared channels. It doesn’t really matter what Microsoft does. We don’t spend a lot of time worrying about it.”
First, Microsoft is an incredible company. I’m a big admirer. They also have been a great partner for us. There are 500,000 active developers on the Slack platform and Microsoft would like them using Azure. Azure has also been a great partner. We just launched Office 365 calendar integration and a bunch of other stuff. So they’re big enough that they end up working with and competing with all kinds of people around the world. We don’t spend a lot of time worrying about it (Microsoft competition with Slack).
Whatever Microsoft does we’re still going to do the same thing that we would do for customers. If the performance of our applications, like the number of milliseconds it takes to startup, is an important thing for customers, we will do that. If shared channels are an important feature we will develop shared channels. It doesn’t really matter what Microsoft does. But having said that I think the emphasis has been a little bit different. Our emphasis has been really broadly on interoperability because we would like to be the two percent of your software budget that’s a multiplier on the value of the other 98 percent.
There are 1,600 apps in the app directory but there are also 450,000 different applications developed internally by our customers that are actively used every week on the Slack platform. That can be things like notifications flowing in or workflow approvals or purchase orders. It’s really varied from teams in finance, legal, engineering, sales, and customer support. That activity is really important to us and is where we see Slack going.
Size Doesn’t Matter, Real Traction With Customers Does
Five years (from when Microsoft was still in Albuquerque) they kind of pulled the rug out from under IBM which was at the time the biggest, most powerful, and most valuable company in the world. Go forward about 17 years and this one is kind of mind-blowing. Microsoft has a 95 percent share of operating systems with Windows. It has 90 plus percent share of internet browsers with Internet Explorer. It bought Hotmail, had MSN, and had probably the biggest engineering presence for stuff online.
It literally controlled almost all of humanity’s access to the Internet and they saw this little company in Mountain View starting to make a real business around search. Over the next couple of decades, tens of billions of dollars into that, and their (Bing) market share is now 9 percent or something like that.
You might think that’s special because the people at Google are real geniuses. But the same thing happened six or seven years later. In 2007, Google sees Facebook where people are spending a lot of time on social networks and that might be a good medium for advertising as well. If you wanted to comment on a video on YouTube you had to use Google Plus. I think the only time that Google ever promoted anything on its home page it was Google Plus. It was also promoted in Gmail and it didn’t matter. The fact that they had a thousand times more engineers and a thousand times more resources (didn’t matter).
They had access to maybe over a billion users even by that point and it just didn’t make a difference. The lesson that we take from that is that a smaller company, if it has real traction with customers, in some cases, has a bit of an advantage against a large incumbent with multiple lines of business. This is like the first 40 or 50 pages of The Innovators Dilemma. There are plenty of companies that have been crushed as well. I think that it’s hard to maintain a real focus on quality and on user experience and the bigger you get the harder it is.
If the competition was based on the quality of user experience and that’s where all the effort is that would be probably more daunting for us. If it’s based on their bigger distribution I don’t think that’s really a threat.
It Doesn’t Really Matter What Microsoft Does, Says Slack CEO Stewart Butterfield
