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American cloud-based software giant Salesforce has announced it's buying workplace chat app Slack, marking one of the biggest – and most valuable - recent deals in the software industry. On Tuesday, Salesforce announced it would pay $27.7 billion for the independent publicly traded company.
Both companies have been vital in 2020’s dramatic shift to remote work, but Slack has been unable to capitalize on the global transition and compete with giants such as Microsoft. The acquisition makes Salesforce a stronger and more direct competitor to other tech giants in the remote work space.
Goliath With Humble Beginnings
Since its launch in 1999, Salesforce has grown into one of the world’s largest software companies through its provision of customer relationship management software. Its current worth is around $220 billion and it has a forecasted revenue of $21 billion in FY 2021.
The company was founded by former Oracle executive Marc Benioff, Parker Harris, Dave Moellenhoff and Frank Dominguez as a SaaS company. When it went public in 2004 with an IPO of $110 million, it only had a team of around 25 developers.
One of the founding values was ‘doing it right the first time,’ and that largely meant having the right team on board.
Although starting small, Salesforce now has more than 25,000 employees worldwide and in September, its shares hit an all-time high. Since it entered the ranks of the Fortune 500 largest U.S. corporations by revenue five years ago, it has climbed to #240. And this year it was ranked sixth in Fortune Magazine’s top 100 companies to work for based on employee satisfaction.
The company’s strong culture is based on the Hawaiian concept of Ohana, or family, which includes a deep-rooted support system fostering communication, shared purpose and collaboration. Behind the company’s culture is larger-than-life founder Marc Benioff.
Leading with Vision
Benioff launched Salesforce out of a one-bedroom apartment in Telegraph Hill in 1999. But he had already had a long history of success. In high school, Benioff sold his first app, How to Juggle, for $75, and at 15, he founded Liberty Software, where his successes included creating and selling Flapper for the Atari 8-bit. By 16, Benioff was earning royalties of $1,500 a month from games he sold to Epyx, enough to put him through college.
After college, Benioff joined Oracle Corporation.
At 23, he was named Oracle’s Rookie of the Year, and at 26, he became the youngest vice president in company history. He stayed at Oracle for 13 years before pursuing his revolutionary idea for switching up the software industry.
Today, Benioff has a net worth of around $7.8 billion, owns Time Magazine, and has been named Innovator of the Decade by Forbes, plus having a string of other accolades to his name.
He has also been well-recognized for his work in philanthropy and equality. In the past, he has said businesses were the greatest platforms for change and they should serve all stakeholders, not just shareholders, to have a positive impact on the world.
But shareholders have nothing to be concerned about, with Benioff’s stated aims of hitting $50 billion in revenue.
By acquiring Slack, he said Salesforce was a whole new type of company and that he was, “Very excited and motivated on everything that we need to do to double the company once again.”
He added to make that happen, the team had to architect a complete solution that encompassed selling, marketing, service, and integration.
He called the deal a match made in heaven, saying “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.”
The Right Team for the Job
Helping with that transition will undoubtedly be the Robin to Benioff’s Batman – Parker Harris. Harris, one of Silicon Valley’s top engineers, has been at Salesforce since day one and is vital to the company’s success.
Not only did he help build the company from the ground up, responsible for Salesforce’s engineering and product and keeping it ahead of the game technologically, but he is also described by colleagues as the down-to-earth, kind, and humble equalizer to Benioff’s unbridled vision.
Former colleague Chuck Dietrich told Business Insider that Harris was the yin to Benioff’s yang. “It’s not the optimist-pessimist, but more like a futurist and reality,” he said, adding Benioff was the visionary and Harris was the voice of reason.
Although typical for an engineer in his early love of computers and math, Harris is less typical in his graduation in English literature from a liberal arts college in Vermont.
Prior to Salesforce, Parker developed cloud computing expertise at Left Coast Software, a company he co-founded in 1996, and salesforce automation expertise at Metropolis Software.
Unlike many in the Valley, Harris is happy to stay out of the limelight – despite his role in turning that spotlight on Salesforce. “I think the legacy is really the company that we built,” he told Business Insider. “That’s what makes me happy. I’m a very simple person, so that’s all I really need.”
President and Chief Operating Officer Bret Taylor has quickly climbed the ranks at Salesforce and will be instrumental in leading the company through its next phase of development.
Responsible for global product vision, engineering, security, marketing, and communications, Taylor is a well-respected software engineer and executive with a very impressive history of building widely used and loved products.
Taylor was most recently the co-founder and CEO of Quip, the innovative collaboration platform acquired by Salesforce in 2016.
Prior to founding Quip, Taylor served as the CTO of Facebook and saw the company through its successful IPO. He's credited with the invention of the “Like” button. Prior to Facebook, he started his career at Google, where he co-created Google Maps. He was also recently tapped to serve on Twitter’s board.
During the pandemic, Taylor has spearheaded product strategy for Saleforce’s workplace reopening software Work.com. Benioff has called Taylor a “rising star of our industry” and said his dream is to work more closely with him.
Also working closely with Benioff and the rest of the team will be President and CFO Mark Hawkins, who would have been a key player behind the recent deal.
With more than 30 years’ experience in leading finance orgs at global software and technology companies, including Autodesk, Logitech, Dell, and Hewlett-Packard, Hawkins will be responsible for Salesforce’s financial growth and the meeting of its ambitious $50 billion targets.
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