Amazon may be on verge of buying Slack; others too in fray
16 June 2017
Slack Technologies Inc, the $3.8 billion work chat app is up for sale, and Amazon Inc is among the companies looking to buy it at a price of at least $9 billion, according to a Bloomberg report on Wednesday.
Recode later reported that Microsoft, Google, and Salesforce might also be potential buyers of Slack.
In the past, Slack chief executive Stewart Butterfield said he had batted down many acquisition offers over the years and instead focused on building the startup into an independent, sustainable company.
But experts say assuming the rumours are true buying Slack would be a smart move for Amazon in particular. As the retailer ramps up its strategy for an assault on the dominance of Microsoft Office and Google Gsuite, the technology and talent at Slack could give Amazon an edge.
Slack and Amazon have so far declined to comment on reports that Slack is up for sale.
The purchase makes sense for Amazon, which has been busy spreading its voice-activated Alexa platform to the masses. Echo speakers are now common in homes and hotel rooms, letting people check the weather, hail Ubers and dim lights by simply speaking to the device. Next, Alexa is coming to cars and will enable drivers to get directions and find restaurants via voice command. According to Bloomberg, the workplace, Slack's bread and butter, is the missing link.
Further, Amazon's cloud computing division, Amazon Web Services, already dominates the market, helping companies save money on servers and IT departments by letting them host computing systems in Amazon data centres and access them via the internet. While it has the infrastructure, Amazon is working to develop more workplace tools available in the cloud to compete with Microsoft's Office and Google's G-Suite. Slack's corporate chat functions and its integration with other services like Dropbox and Github could help Amazon narrow the feature gap with Microsoft Corp and Alphabet Inc, and complement its other products such as Chime, an online video conferencing and file-sharing tool.
Amazon also lacks a robust messaging platform. And while Slack's 5 million users are paltry compared with Facebook's 1.2 billion Messenger users, it would be a start. As messaging continues to eat up more of mobile users' time and attention, Slack could become Amazon's ticket to owning a popular chatting platform. Slack users love the service - it's often brought into companies from the ground up.
The success of Slack kickstarted a movement toward chat as a major market: Microsoft recently launched Teams, its own take on the concept, after Bill Gates himself reportedly talked the company out of trying to buy Slack outright. Google quickly followed suit with Hangouts Chat.
And there's the talent: at last count, Slack had over 800 employees at offices in San Francisco, New York City, and elsewhere, all focused on cracking the problem of office productivity. More recently, Slack has accelerated its efforts in artificial intelligence.
Plus, if Amazon wanted or needed a leader in its push into the office, it could do worse than Butterfield himself, who led Slack's growth from nothing into a major player in less than four years, Bloomberg suggests.
The final question, then, is whether or not Slack would sell. It seems likely enough, as Butterfield has made it clear that he sees Microsoft Teams as Slack's biggest threat.