Salesforce Acquisitions

Salesforce Acquisitions

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Salesforce was founded in 1999 by Marc Benioff, Frank Dominguez, Dave Moellenhoff, and Parker Harris. In a relatively short time, the corporate powerhouse of enterprise software has made numerous acquisitions as part of its broader growth strategy to become a SaaS giant!

So who are these companies? Let’s take a look at a few of them below.

Slack

slack-business-model
Slack follows a freemium model, where a free version is offered, and users can convert in paying customers if they want more usage or advanced functionalities. Slack combines the free model with a direct sales force to acquire enterprise customers with yearly recurring revenue of over 100K. Those customers were 575 in 2019, and they accounted for 40% of its revenues. 

At $27.7 billion, Slack is the company’s largest acquisition.

As part of the deal, Slack’s messaging app would be incorporated into the Salesforce enterprise software without any change in the former’s branding, leadership, or functionality.

The Slack purchase also enabled Salesforce to further the remote working trend and create a powerful platform for the work anywhere, digital-first world.

MuleSoft

Salesforce’s acquisition of MuleSoft in 2018 for $6.5 billion gave it access to the company’s large customer base and beneficial technology.

By incorporating MuleSoft’s integrative features, Salesforce could become a market leader since its functionality could more easily be incorporated into existing business systems.

One such feature was an API platform/library known as Anypoint that does not require custom integration code.

MuleSoft’s client list was also impressive, including corporate clients such as eBay, Netflix, Wells Fargo, Barclays, Coca-Cola, and Target.

Tableau

Enterprise data platform Tableau was purchased by Salesforce for $15.7 billion in June 2019, the second largest in the company’s history.

Many pundits considered the move to be a key component of Salesforce’s strategy to obtain a 360-degree view of the customer and become an enterprise data stack.

Prior to the deal, more than 86,000 organizations used Tableau’s visual analytics platform to view their data and use it to solve problems. Some of these included Southwest Airlines, Verizon, Schwab, and Schneider Electric.

ExactTarget

ExactTarget is a provider of email marketing services that are one-to-one and on-demand.

When Salesforce acquired ExactTarget in 2013 for $2.5 billion, this was seen as a logical step in the company’s expansion into marketing.

Like the purchase of Vlocity – which we’ll explain below – the purchase of ExactTarget furthered SalesForce’s mission to transform how companies connected with their customers via sales, service, and marketing.

Vlocity

Before being purchased by Salesforce for $1.33 billion in early 2020, Vlocity had already built six separate CRMs in media and entertainment, insurance and financial services, health, energy and utilities, communications, and government and non-profits.

Some saw the deal coming since Salesforce Ventures was a key investor in the company, but it nevertheless enabled the company to bolster its industry-specific CRM solutions, develop strategic partnerships, and add more functionality to its platform.

ClickSoftware 

Salesforce purchased ClickSoftware for around $1.35 billion in 2019, a provider of field service management (FSM) and workforce management software.

The deal, which occurred two months after the one involving Tableau, ostensibly allowed Salesforce to improve its field service products for mobile workforces.

A secondary but no-less-important consideration was ClickSoftware’s 15,400 clients such as Ericsson, Unisys, Bosch, and Deutsche Telekom.

Key takeaways:

  • Salesforce has made a number of significant acquisitions in a relatively short period. The deals involving Tableau and Slack, for example, both exceeded $15 billion.
  • Salesforce acquired email marketer ExactTarget in 2013 and related firm Vlocity in 2020. Both deals enabled Salesforce to bolster its CRM offering and develop strategic industry relationships.
  • Other notable purchases include MuleSoft for $6.5 billion in 2018 and FSM provider ClickSoftware the following year.

Key Highlights

  • Slack:
    • Salesforce’s largest acquisition at $27.7 billion.
    • Slack’s freemium model combined with a direct sales force to acquire enterprise customers.
    • Slack’s messaging app integrated into Salesforce’s software while maintaining its branding and functionality.
    • Strengthened Salesforce’s remote work and digital-first platform.
  • MuleSoft:
    • Acquired for $6.5 billion in 2018.
    • MuleSoft’s integrative features allowed easier incorporation of Salesforce into existing business systems.
    • Access to MuleSoft’s API platform/library, Anypoint, for seamless integration.
    • Benefitted from MuleSoft’s impressive client list, including eBay, Netflix, and Wells Fargo.
  • Tableau:
    • Purchased for $15.7 billion in 2019.
    • Added enterprise data platform capabilities to Salesforce’s offerings.
    • Enabled a 360-degree customer view and enterprise data stack strategy.
    • Tableau’s visual analytics platform used by major organizations like Southwest Airlines and Verizon.
  • ExactTarget:
    • Acquired in 2013 for $2.5 billion.
    • Expanded Salesforce’s reach into marketing with email marketing services.
    • Supported Salesforce’s mission to connect companies with customers via sales, service, and marketing.
  • Vlocity:
    • Bought for $1.33 billion in 2020.
    • Added industry-specific CRM solutions, strategic partnerships, and platform functionality.
    • Salesforce Ventures was a key investor in Vlocity prior to acquisition.
  • ClickSoftware:
    • Purchased for around $1.35 billion in 2019.
    • Enhanced field service products for mobile workforces.
    • Added 15,400 clients, including Ericsson and Deutsche Telekom.

Read Next: Salesforce Business Model, Slack Business Model

Related Visual Stories

Who Owns Salesforce

Who Owns Salesforce?
Marc Benioff, Co-CEO of Salesforce, is the primary individual shareholder, with nearly 3% of the company’s stock. Other main individual shareholders comprise Parker Harris, Co-Founder, and Chief Technology Officer, and Bret Taylor, former co-CEO. Major institutional shareholders include The Vanguard Group, Fidelity, and BlackRock.

Salesforce Business Model

Salesforce business model
Salesforce follows a SaaS business model, offering four main categories of cloud CRM (Customer Relationship Management) services spanning the sales cloud to the marketing cloud. Where subscriptions drive the primary revenue model. However, the company leverages professional assistance to push the adoption of the software and retention of paying subscribers. Indeed, by 2024, Salesforce generated over $32 billion from subscriptions and $2.32 billion from professional services.

Salesforce Revenue

Salesforce Revenue Breakdown
In 2024, Salesforce generated $32.54 billion from subscriptions and $2.32 billion in professional services, compared to $29 billion in subscriptions in 2023 and $2.33 billion in professional services.

Salesforce Employees

Salesforce Employees
Salesforce had 72,682 employees by 2024, compared to 79,390 employees in 2023, 73,541 employees in 2022, and 56,606 employees in 2021.

Salesforce Marketing Expenses

Salesforce Marketing And Sales Expenses As % of Total Revenue
By 2024, Salesforce spent 37% of its total revenues on marketing and sales expenses, compared to 43% of its total revenue in 2023, 45% in 2022, and 45% in 2021.

Salesforce Cost Structure

Salesforce Cost Structure
Professional services are run at negative gross margins. In short, by 2024, on $2.33 billion in revenue from professional services, Salesforce reported a $44 million gross loss. In short, Salesforce runs professional services at a loss to boost its subscription revenue over time since professional services are used to enhance the use and retention of the software. The subscription revenue cost structure is quite effective. By 2024, on over $32 billion in subscription revenue, the company reported $6.18 billion in cost of revenue (expenses related to delivering the service and providing support, including the costs of data center capacity), thus generating a $26.36 billion in gross profits, in 2024.

Salesforce Revenue Per Employee

Salesforce Revenue Per Employee
Salesforce revenue per employee in 2024 was almost $479,582, compared to over $394,911 in 2023, $360,234 in 2022 and $375,437 in 2021.

Salesforce Competitors

Salesforce Competitors
Salesforce is a cloud-based customer relationship management (CRM) provider, allowing businesses to build meaningful and sustained relationships with their customers. With robust, customizable software that integrates with social media, Gmail, and Microsoft Outlook, the Salesforce CRM platform is rated highly among businesses of all shapes and sizes. Recent data has shown that the company has captured 19.5% of the global CRM market.

Salesforce Mission Statement

Salesforce Mission Statement
Salesforce’s mission is to build bridges between companies and customers. Salesforce does that via a SaaS platform, which is enhanced via professional services offered on top of it.

Salesforce Acquisitions

Salesforce Acquisitions
Salesforce was founded in 1999 by Marc Benioff, Frank Dominguez, Dave Moellenhoff, and Parker Harris. In a relatively short time, the corporate powerhouse of enterprise software has made numerous acquisitions as part of its broader growth strategy to become a SaaS giant!

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