Slack’s revenue will be a tiny drop in the bucket for Salesforce. Slack is projected to grow 39% to $876.3 million in the fiscal year ending January 31, according to analysts surveyed by Refinitiv. Slack is much smaller than Salesforce - whose revenues Benioff aims to more than double to $50 billion, according to CNBC. While Salesforce reported 29% revenue growth in the second quarter, its 2020 forecast in the 21% to 22% range “would represent the company’s slowest rate of expansion since 2010,” according to CNBC. It seems to me that there is no coincidence in the timing of the announcement of this deal on the same day as Salesforce announced earnings which featured slowing revenue growth. Salesforce’s Growth Is Slowing Down and Acquisitions Won’t Close the Gap Indeed Microsoft has done a better job at turning WFH into a tailwind by adding videoconferencing to Teams and heavily promoting the collaboration service, according to the Journal.
Slack’s slower growth is due in part to the perception that it has not positioned itself well for WFH’s potential tailwind the way Zoom and Shopify have. Slack stock - up 26% for the year before deal rumors surfaced last week - has been underperforming its cloud peers. Whereas Zoom’s third quarter revenues grew 365% to $777 million, Slack’s growth lagged considerably - revenues rose 39% to nearly $235 million. The work from home (WFH) trend spurred by the pandemic has left Slack in the dust compared to Zoom.Ī look at the third quarter report of both companies shows just how much. Now with Slack, it provides this incredible credible window into a collaborative interface onto all of our services and the whole enterprise itself,” reported CNBC. Customers are rearchitecting how they are work. “Slack changes everything and makes Salesforce a whole new type of company. Salesforce CEO, Marc Benioff sounds exuberant about this acquisition.
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