Who Owns Slack?

In a $27.7 billion deal in 2021, Salesforce’s finalized the acquisition of Slack, which was integrated into Salesforce. Today Slack is still a product mostly independently managed by Salesforce, which incorporated some of its features within its platform. Salesforce is primarily owned by entrepreneur Marc Benioff.

Slack’s story

Stewart Butterfield is a serial entrepreneur and co-founder of the photo-sharing website Flickr.

He went through the founding of several companies, in particular, when he founded Glitch (an online game). 

When he was running Tiny Spek, which comprised a set of companies, Butterfield and his team needed a communication system to handle the teams within his organizations.

That tool was developed in-house, and it eventually became Slack.  

When Slack launched back in 2013, more and more companies signed up until its growth kept compounding. Where did this opportunity come from?

The timing was right!

Butterfield said in an interview for CNET:

“In the last 15 years, the Microsoft hegemony and Office and Windows worship has broken down, and as a result, we’ve gotten a lot of new and, in most cases, better tools…But that means information is scattered across a bunch of different tools and there’s no one search tool that you can go through to search across all of this.”

From that stage, Slack kept inviting larger and larger groups of companies.

By 2021, it was harder and harder for Slack to compete against Microsoft’s aggressive strategy of bundling Teams into its suite of productivity tools.

That prompted Slack to write a whole advert to prompt Microsoft about it.

Yet, by 2021, it became clear to Slack that to be able to compete with Microsoft’s aggressive bundling strategy, it needed to become part of a larger group.

From there, the acquisition from Salesforce for over $27 billion.

Yet, by the end of 2022, as Benioff went back to lead Salesforce and push more integrations of independent products, like Slack, within the company’s strategy, former Slack’s CEO and founder left the company!

In the meantime, Slack generated $1.5 billion in revenue by early 2023, signaling the incredible potential of the company.

And yet, the need for Salesforce to integrate more and more Slack into the company’s strategy.

Slack is now part of Salesforce’s family, acquired in 2021 for $27.7 billion. When the company got acquired, it generated, by early 2022, a yearly net revenue of $1.1 billion. As Slack has been integrated into Salesforce, post-acquisition, the company generated $1.5 billion in revenue yearly as of January 2023.

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Who Owns Salesforce

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

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, in 2023 Salesforce generated $29 billion from subscriptions and $2.33 billion from professional services.

Salesforce Revenue

In 2023 Salesforce generated $29 billion from subscriptions and $2.33 in professional services, compared to $24.66 billion in subscriptions in 2022 and $1.83 in professional services.

Salesforce Employees

Salesforce had 73,000 employees in 2022, compared to 56,000 employees in 2021, and 49,000 employees in 2020.

Salesforce Marketing Expenses

In 2023, Salesforce spent 43% of its total revenue on marketing and sales expenses, compared to 45% in 2022, and 45% in 2021.

Salesforce Cost Structure

Professional services are run at negative gross margins. In short, in 2022, on $2.33 billion in revenue from professional services, Salesforce reported a $208 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. In 2022 on a $29 billion in subscription revenue, the company reported $5.82B in cost of revenue (expenses related to delivering the service and providing support, including the costs of data center capacity), thus generating a $23.2 billion in gross profits, in 2023.

Salesforce Revenue Per Employee

Salesforce generated $208 million in profits in 2023, compared to $1.44 billion in 2021, and over $4 billion in profits in 2020.

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’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 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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