![]() ![]() Microsoft Teams was used by over 500,000 organizations worldwide in 2020. Microsoft Teams has 145 million people using its collaboration services, up 26% YoY.Slack currently has 156,000 total paying customers, up 42% YoY, and had up to 12 million daily active users and 156,000 organizations in 2020.Competition is expected to intensify as businesses define their new remote or hybrid work strategies. They helped provide an ad-hoc foundation for the new remote work reality. Virtual collaboration software like Slack and Microsoft Teams saw unprecedented adoption during the pandemic. Given the risks of the deal and Salesforce’s valuation of over $200 billion, analysts have suggested that their investors root for an antitrust review to prevent the deal.Why it’s worth watching: Business collaboration has become a hugely competitive market, not just for the tools themselves, but for the companies and platforms they are associated with. Further, if Salesforce were to affect Slack’s internal operations through the acquisition, some existing customers may be turned away, as many customers now enjoy Slack for their simplicity and neutrality. This is concerning for Salesforce, who would be giving up nearly 13% of their market value for the acquisition based on Slack’s EV/Sales multiple seen in Figure 2. Since Slack is a SaaS valued at multiples of revenue instead of profits, their growth forecast faces immense pressure on its ability to materialize as earnings. They have not turned a profit since their initial public offering last year. Furthermore, Slack’s growth should be a risk for Salesforce. A much better suited one could argue could be Google or Amazon as they could integrate Slack into their platforms, but that would be unlikely due to antitrust regulations. On the other hand, Slack could be a distraction for Salesforce management and could therefore not be believed to be the best owner for Slack. ![]()
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