Microsoft considered buying Slack for $8 bn
07 March 2016
Microsoft had considered acquiring messaging service Slack for $8 billion. According to some commentators, this would have been an enormous waste of capital and an absolutely terrible decision for the company.
They say Microsoft made the right move in avoiding purchasing Slack, especially in view of its price.
Slack, which is similar to Skype or other person to person messaging services, is focused on providing tools for the enterprise. For instance, it offered cloud-based document sharing, discussion and collaboration in addition to simple messaging. It took the best of social media functions across several apps and tried to do what many other companies were working on doing; using cloud computing to create efficiency in the workplace.
Microsoft had the choice of starting anew if it wanted to enter this market, or building services it already had, like Skype. Also, Microsoft had already acquired enterprise messaging system Yammer in 2012.
There were two other products that could be compared to Slack - WhatsApp, for person-to-person messaging, and Facebook at Work, the company's goal of creating efficiency in the workplace.
Slack was among the hottest enterprise apps right now counting 2.3 million daily users - of which nearly 700,000 paid and there was potential for substantial expansion.
Thanks to the very specific set of features it offered, the app had become part of the lives of workers as diverse as developers, journalists, and schools, and had become a resource that was used every hour of every day.
Slack's users had all come by word-of-mouth as the app, valued at around $3 billion, had not done any advertising. It however, has the support of some of Silicon Valley's biggest venture capitalists.
TechCrunch, reported that several Microsoft executives were in favour Slack acquisition, abut the campaign failed to find support with CEO Satya Nadella and co-founder Bill Gates.
Instead of acquiring Slack, the company would focus on Skype, the service it bought for $8.5 billion in 2011.