Business magnates love quoting Sun Tzu, the Chinese military philosopher.
With news that SaaS pioneer Salesforce is looking to acquire Slack, Tzu’s adage, “the enemy of my enemy is my friend” comes to mind.
In this case, the common enemy is Microsoft.
According to the Wall Street Journal, Slack’s workplace competitors have grown much faster during the pandemic:
The video opportunity has passed and Microsoft is aggressively bundling Teams into its other enterprise offerings like Office (to the point that Slack filed an antitrust suit in Europe).
The core of Salesforce’s business is right in its stock ticker, $CRM: customer relationship management. Marc Benioff — who founded the company in 1999 — has built a $225B software beast in this niche.
Benioff has been eyeing workplace collaboration for more than a decade. Per the WSJ, his company:
Meanwhile, Microsoft is creeping into the CRM space with its Dynamics product. And although Salesforce has much greater market share (~20% to ~3%), the threat is all too real.
And he’s been making it rain in recent years:
With Salesforce up 50% since late February, Benioff possesses a valuable currency known in the industry as “funny money” (AKA a high stock price).
He’s ready to spend and has his target: Slack, currently valued at $23B.
All roads lead us to this Sun Tzu quote: “Invincibility lies in the defense; the possibility of victory in the attack.”