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Salesforce Could Become Digital Workplace Player With Slack, Gartner Analyzes Content Services & More

November 30, 2020 Digital Workplace
David Roe
By David Roe

It’s unlikely that anyone saw it coming but when it emerged, or was leaked, that San Francisco-based Salesforce is in talks to acquire collaboration and messaging app Slack to further its enterprise ambitions, it wasn’t really a surprise.

Despite the fact that Slack has announced record user numbers during the past eight months of remote work, the San Francisco-based company doesn’t appear to have been able to capitalize on that growth for a number of reasons, including market competition from other products, particularly Microsoft Teams, which has moved to the center of Microsoft’s enterprise productivity ambitions with Microsoft 365.

While details of the negotiations are under tight wraps, it is believed that news of a deal could come as early as this week. According to reports from Reuters, which in turn cites sources “familiar with the matter,” Salesforce will pay cash for the deal rather than through stock, the usual way these kind of acquisitions play out. No details of how much the deal might be worth has emerged, but Slack was estimated to be worth $17 billion at its last valuation.

So why the deal now? There are several different possibilities including the double-edged sword of remote working. While it is true that millions of workers are now using Slack as a communication tool from home, it is also true that many companies had to cut back on spending, including tech spend. This forced Slack to offer its products at a discounted price in some cases andmake payment concessions to others. It’s likely that Slack is suffering financially the longer the pandemic goes on even though its communications platform has been downloaded 12.6 million times over the period.

The flip side of this is that Salesforce has been thriving over the past eight months and raised its annual revenue forecast last August as remote workers in sales, marketingand customer relationship management turned increasingly to Salesforce to meet business goals.

One final consideration is the level of enterprise traction Microsoft has in the productivity market. As the financial impact of the pandemic becomes more pronounced, organizations are looking at ways to cut back on spending. One way to do that is to turn to Teams, which is included in many of the Microsoft 365 business packages and, as a result, costs enterprises nothing to use.

“I think Microsoft Teams has been able to capitalize on the opportunity better than Slack, partly because they give it away for free as a bundle,” Rishi Jaluria, an analyst at research firm DA Davidson and Co, told Reuters. “Now Slack realizes that they might be able to get greater penetration as part of a larger company.”

One way or the other, if the deal does go ahead, Slack backed by Salesforce gives the competition in the unified communications and collaboration space an entirely new sheen. The ongoing competition between Microsoft and Slack will become Slack and Salesforce vying for a bigger piece of the pie, and in many cases that could be Microsoft’s pie. It is not a done deal yet, but if it does happen it would certainly close 2020 with a bang.

Content Platform Services’ Rising Fortunes

Elsewhere this week, Gartner published its latest Magic Quadrant for Content Platform Services (behind paywall). While content services is a relatively new concept, emerging in 2016 when Gartner decided that the term enterprise content management (ECM) no longer described what enterprises are looking for or need, many of the vendors that made their way into the report are vendors that have been operating in the space for the past 20 years.

The vendors that made it into the leaders’ quadrant are Microsoft, Hyland, Alfresco, OpenText and Box, in that order. In all, there are 18 vendors this year. However, what really stands out is the market analysis that can be summed up under four themes:

  1. Changing client expectations and demand: Client demand has moved well beyond the traditional domain of imaging and governance. Organizations using these products are looking for simplicity and ease of adoption. This has enabled vendors that have had a more collaboration-focused outlook to gain bigger market share.
  2. Move to the cloud: Organizations are moving services to the cloud. This has been accelerated by the response to the COVID-19 crisis. The need to implement and maintain content flow (the provision of content to employees as and when they need it) requires cloud-based services.
  3. Integrated intelligent services: Intelligent services, primarily those powered by machine learning, have made a large impact on vendor offerings in this space in 2019 and 2020.
  4. Consolidation: This has been an ongoing theme for several years and Gartner expects more activity in the next 12 to 18 months. The recent Hyland-Alfresco acquisition demonstrates that large vendors, even with very different strategies and offerings, can come together, the report reads.

There is a lot more here that is worth a look for enterprises looking at digital transformation and beyond.

Microsoft’s Productivity Score Storm

Meanwhile, at the beginning of November, Redmond, Wash.-based Microsoft released a new tool into the digital workplace that is creating consternation among remote and digital workers who feel it enables workplace managers to excessively monitor their what they are doing.

The new Productivity Score, now in general availability, is designed to see what tools in Microsoft 365 are being used, how they are being used and by whom. According to the blog post unveiling the new product, using it will enable workplace managers to improve experiences over time by recognizing and proactively addressing issues across the workplace so that customers can get more value from their investment.

Productivity Score provides visibility into how the organization works, insights to identify where to make improvements, and actions to update skills and systems so that everyone can do their best work. It shows people's experiences across five categories: content collaboration, meetings, communication, teamwork, and mobility.

But it is not without its critics, and there appears to be many of them across the web. Wolfie Christl, an Austrian researcher with Cracked Labs, an independent research institute that investigates the socio-cultural impacts of information technology in digital culture, raised the alarm about the feature in a series of tweets about the release.

This is problematic at many levels, he tweeted. “Employers/managers can analyze employee activities at the individual level (!), for example, the number of days an employee has been sending emails, using the chat, using 'mentions' in emails.”

Further down the tweet thread he adds: “Showing data on individuals can be turned off, but it's activated by default. This normalizes extensive workplace surveillance in a way not seen before. I do not think employers can legally use it in most EU countries. I'm sure they cannot legally use it in Austria and Germany.”

While it is unclear what the status of this kind of monitoring will be Microsoft has been quick to defend it. In a statement, a spokesperson told the Guardian newspaper in the UK that productivity score is an opt-in experience that gives IT administrators insights about technology and infrastructure usage. Insights are intended to help organizations make the most of their technology investments by addressing common pain points like long load times, inefficient document collaboration or poor network connectivity.

This is far from over and looks like it could create problems for Microsoft in the coming weeks. That said, it is not the only company that offers something similar. In the paid edition of Slack, for example, business managers can see what employees are writing.

AvePoint Plans $2 Billion IPO

Elsewhere, NJ.-based AvePoint has announced it is planning to sell itself to Apex Technology Acquisition Corp., a special-purpose acquisition company (SPAC) that will effectively launch AvePoint as a public company with a valuation of about $2 billion.

SPACs are companies created with the specific purpose of buying a private company and enabling it to go public quicker than a traditional IPO. The advantages of the SPAC route are to bypass traditional registration processes and the investor road show that companies generally must carry out before they can go public. They are increasingly popular; 198 of the 370 IPOs launched in 2020 so far were carried out as SPACs.

Explaining the thinking behind the SPAC, CEO Tianyi (TJ) Jiang, who will lead the new company said: “We plan to use this infusion of capital to scale our innovation so we can deliver more value and more solutions across Microsoft 365 and other digital collaboration platforms. We will expand our geographic footprint as well as look to increase our channel presence and support for managed service providers.”

In other words, expect a lot more new products that will support the data management needs of both Microsoft 365 and other platforms. After the deal is closed, the combined company will be named AvePoint and will remain a publicly traded company listed on Nasdaq under a new ticker symbol, AVPT.

IBM’s New Automation and Data Upgrades

Finally this week, Armonk, New York-based IBM announced a series of data and automation updates to its hybrid cloud software portfolio to help companies drive digital transformation.

The new updates are coming to IBM Cloud Pak for Data and Cloud Pak for Automation, which offer integrated data and AI capabilities that run on Red Hat OpenShift. The new releases are designed to better manage and automate data-intensive processes – fusing the intelligence of Watson AI in hybrid cloud environments.

With these updates, businesses will be positioned to streamline everything from software provisioning and patching, to data discovery and document processing across expanding hybrid cloud environments, enabling employees to focus on higher value work.

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