Why Salesforce Really Bought Slack
Salesforce's recent purchase of Slack for $27.7 billion is already old news. Why Salesforce paid so much however, is still a matter of speculation. Major press outlets including the Wall Street Journal, the Washington Post and the New York Times reckon the purchase helps Salesforce expand its footprint into remote working, with Slack already enabling at home workers to collaborate in real-time. Slack also helps Salesforce compete with Microsoft, whose Teams collaboration product saw meteoric growth during the COVID-19 pandemic, going from 13 million to 115 million users in just 19 months.
Both reasons are valid, but they miss the contribution of Slack’s new Connect offering to Salesforce's core business value proposition. Let’s break this down.
What Is Slack … Really?
According to its website, Slack is “a place where people get work done … Unlike email, conversations in Slack are easy to follow. And they’re more than conversation, you can make calls, share files, and even connect with other apps.”
“Unlike email?” So, Slack wants to replace email? While Slack got the reputation early on of being an "email killer," Butterfield stated in a recent Wired interview that he wants no such thing. As a universal standard, email is the lowest common denominator for communications, so anyone can message anyone else. Butterfield has admitted to using email himself.
Instead, Butterfield wants to supplant email where real-time conversations make sense for business. “We’re carving out the pieces of email where we can make an improvement for a specific set of use cases.” One of those use cases is customer success and support, which is why Slack’s new Connect offering is so important.
What's Slack Connect Got to Do With It?
During 2020, Slack introduced its new Slack Connect offering. According to the Slack website, “Connect transforms the way you work alongside your partners, vendors or customers by moving conversations out of siloed email threads and into the same place.” How does this work and why is it important to working with partners?
Companies have been using email to work with customers, suppliers and partners for years. Salespeople, account managers, project managers, support engineers and many other people routinely share contracts, proposals, status reports, requests and other business documents via email and it seems to work just fine.
So if it ain’t broke, why fix it?
Well, because it is broken. New real-time collaboration products like Slack and Microsoft Teams offer real-time conversations that are faster, more dynamic and more collaborative than email. People, especially those working remotely at home, crave the immediacy of text messaging. Real-time conversations scratch the immediacy itch. The problem is, chat conversations are great for internal communications but they don’t work well for cross-organizational communications. Here’s why …
When an organization signs up for Slack or Microsoft Teams, they get a network for conversations. Once set up, finding and connecting to colleagues is easy because all employees belong to the same corporate directory structure. All internal conversations are stored within the corporate tenant, which is important for security and privacy requirements. When conversations are needed for ediscovery or for audit purposes, all business correspondence can be retrieved from the corporate repository. The information is accessible and searchable.
So far, so good.
Related Article: Slack's Innovation and Momentum Continues Apace
Connecting With Partners
But business communications entail more than internal conversations. To do business, you need to communicate with external parties like customers, suppliers and partners. Teams and Slack facilitate this by enabling you to add external people as guests to your (host) network. Once added as guests, the external party can initiate conversations and participate in team activities, just like employees. And as long as the relationship with a partner exists, communications are seamless. When relations are severed, only the host retains the conversation data.
Here's where the trouble starts. Cross-organization conversations include contract negotiations, legal discussions and other matters of record. Losing access to business-critical information is simply not an arrangement that most organizations can accept, for governance and compliance reasons. This shortcoming of collaboration tools is one reason external communications still occur in email. With email, both parties preserve an identical copy of all correspondence. If relations are severed, both parties retain a complete record of what transpired.
That’s why internal communications are taking advantage of the new real-time collaboration tool, but external communications continue to rely on email. The result is a disconnected communication stream that bifurcates internal and external communications. If you are an account and support manager, you probably receive questions or requests from customers via email and then need help from colleagues to answer the question. The initial inquiry arrives via email, the internal discussion takes place in Teams or Slack, and the answer is sent back using email. Trying to follow and later piece together this conversation is difficult. So, while conversations have improved internal communications, they may actually be degrading business productivity and effectiveness.
This is precisely the problem that Slack Connect purports to solve. Among other things, it enables organizations to retain their own copies of conversations, even after relations between partners are severed. Rather than a host/guest model, Connect offers a symmetric model of communications, similar to email. When relations are severed, both parties retain an identical snapshot of communications, which is acceptable for information governance and compliance requirements.
Of course, Connect doesn’t solve all the problems associated with adding a new communications tool. This new world of integrated communications is just getting off the ground and there are many more issues to be addressed, including the following:
- Limiting channel sprawl – making it easy for people to know what is being discussed across channels, to avoid creating duplicate channels.
- Deprecating idle channels – removing the clutter of inactive channels without hiding important information that may be contained in those channels.
- Channel provisioning – making it easy to set up conversation channels between the right people on both sides of the partnership, so people can focus on working rather than on managing technology.
- Finding information across teams and channels – finding information across all the conversations. Both Teams and Slack provide Search, but work still needs to be done to prioritize search results by context, so the most relevant information is surfaced easily.
- Governance – there are still a number of unsolved issues related to who can join a channel and what information they can share. Features like private channels are a good first step, but there is still work to be done.
Salesforce, Slack and $27.7B
Now, back to that $27.7 billion price tag. Understanding how Connect works highlights why Slack is so important to Salesforce. Slack has focused on enabling cross-organizational conversations, like those common in sales and support organizations, which is precisely the core Salesforce market. In effect, Slack provides Salesforce with an integrated communications tool to help sales and support people engage and manage customers, suppliers and partners. By enabling a single communications stream between business partners, processes are more efficient, information governance and compliance are simpler, and people can be more productive.
Of course, Slack’s extensive integration with third-party tools is another important part of the equation, but the single communication stream offers Salesforce a unique value proposition, currently unavailable to competitors.
Email’s eulogy has been written many times, while its use continues to grow. Email's not going to disappear anytime soon. On the other hand, workers crave the convenience and immediacy that Teams and Slack provide. Going forward, workers will expect a seamless communication stream that is both immediate and easy to use and information manager will need to make sure this stream is secure, private and scalable.
Slack is taking one direction by providing a solution that focuses on specific business use cases. Microsoft needs to take a different approach. With hundreds of millions of users, Microsoft addresses a much broader set of organizational needs. And with 400 million Outlook users, a Microsoft solution will entail a streamlined user experience across Outlook and Teams; providing workers a seamless experience while leveraging the governance/compliance capabilities baked into Microsoft 365.
Let’s not forget these are early days for this generation of enterprise collaboration products. While chat has been around for over 30 years, and available from companies like Microsoft and Google for many years, the 2020 pandemic has breathed new life into conversations. As people work increasingly from remote locations, they now demand the real-time immediacy afforded by conversations. We are entering an exciting new era for remote enterprise collaboration. Microsoft Teams, Slack and Zoom are merely the first entrants. We can look forward to new innovations over the coming years.
About the Author
David is a product and marketing expert with extensive experience leading early-stage, high-growth technology organizations, especially in the collaboration, IT, cybersecurity, and networking markets. His specialty is helping early stage technology companies "do it right the first time" — get to market quickly and successfully by pragmatically applying Lean Startup principles — from strategy through full execution.