Talking up the Slack - Salesforce COO Bret Taylor on the role the firm’s $27.7 billion acquisition will play in shaping the ‘new normal’

Profile picture for user slauchlan By Stuart Lauchlan March 4, 2021
Summary:
Slack is a $27.7 billion gambit on the part of Salesforce, but one that has an integral role to play in the post-COVID new world of work, says Bret Taylor.

Bret Taylor

No technology firm’s pitch in 2021 would be complete without a contemplation of the so-called ‘new normal’, a fairly empty, catch-all term that’s been bandied around since the start of the COVID outbreak, but one which needs practical meat put on its bones as the Vaccine Economy kicks in.

What form that fleshing out takes will vary from vendor to vendor, of course, but it’s probable that most analyses would largely fall Into line with this assessment from Salesforce Chief Operating Officer Bret Taylor:

All I can tell you is it looks a lot different than it did in 2019 and is probably more similar to what we're experiencing right now than not.

Salesforce, as we’ve noted previously, has ‘had a good war’ when it comes to responding to the pandemic. As its recent full year numbers confirmed, the firm adapted to a new digital, work-from-anywhere mode of operating with considerable success, with its experiences now shaping its go-to-market messaging to customers as they themselves wrestle with the ‘new normal’ question.

Slack and the future

For most organizations, the COVID crisis is entering a new phase, one in which some practical operating considerations need to be addressed, as Taylor noted during an appearance at this week’s Morgan Stanley TMT Conference:

In March and April last year, everyone was in paralysis, just trying to figure out how to grapple with the pandemic. The number one priority in every boardroom and in every executive team right now is just getting back to growth.

Taylor inevitably pitches the Salesforce portfolio of offerings - from Sales Cloud and Service through Commerce Cloud and Marketing Cloud to MuleSoft and Tableau - as enabling that growth and being hugely relevant to the needs of customers across multiple business sectors, with readily-available proof points - internal and external -  on offer to substantiate his claims.

But one aspect of the Salesforce strategy that is as yet less tried-and-tested is the role Slack will play in the mix moving forwards. Salesforce announced its $27.7 billion acquisition of the firm back in December last year, its single largest M&A gambit to date. The deal is still rumbling through the required regulatory approvals, but assuming that it gets the necessary green light in the near future, where will this new asset sit in the Salesforce pantheon? And will it prove to be worth the breath-taking price tag that Salesforce intends to pay?

On that last question, Taylor reaches back to the motivation for the purchase in the first place, which in turns feeds back into those ‘new normal’ questions everyone’s having:

It was really based on a thesis that we really firmly believe, which is that the future of work has fundamentally shifted from where it was a couple of years ago. I probably talk to ten-plus executive teams every single week and the topic of flexible work, and the digitization of the back office all the way through to the customer experience, is very permanent. For every single company, travel policies, entertainment policies, real estate policies - everything’s on the table now in ways that they weren't before. Similarly, just talk to anyone about what meetings you’ll  need to get on an aeroplane for two years from now. You probably don't know [the answer], but it's probably significantly fewer than before. We’re in the era of Slack and Zoom and we're not going back!

A lot - maybe not all, but certainly a lot - of interactions will be permanently digital, he asserts, and that means organizations need to think about what the operating system for growth will be in this ‘new normal’. And from Salesforce’s standpoint, of course, the answer to that is it looks a lot like Slack and its Customer 360 strategy, a scenario in which Slack can be a ‘command center’ across multiple functions. Taylor cites some possible exemplars:

What does it mean to be a digital selling team and drive growth? What an opportunity to use Slack to engage with your partners, engage with their customers, to engage internally for selling teams. For customer service, what does it mean when a call center is no longer a building, it's a digital incarnation in the cloud? When someone's in the field with our field service product, how do you collaborate with the contact center to get a fast time to resolution and move on to that next case?

So, first up then, Slack is an enabler of a whole new way of working. According to Taylor:

There's a vision for the way people work that [Slack founder and CEO] Stewart Butterfield and that team have. It's inspirational and we're really thinking about it as a much more disruptive new view of even how our own software works. We see Slack as really representing that future. Talk to happy Slack customers, like Intuit or Xero, that are also Salesforce customers. It really is about how do you engage every stakeholder in the business needed to drive that customer experience, drive that employee experience and [Slack’s] incredible ease of use and incredible engagement really drives that.

Platform for growth

A second appeal of Slack from Taylor’s perspective is its platform status:

There are 2,400 apps on the Slack platform and one million weekly active developers. It's really connecting every person and every system for companies. It's an open platform and a really open ecosystem. I think that's a really powerful technology, whether you're a CIO or a CEO or a Chief People Officer faced with defining the 'new normal' for your company, and you're saying, ‘How do we make sure our culture maintains growth? How do we maintain our customer experience?’ and really thinking about a digital interface that can tie all these things together, whether you're in the office or [virtual].

The breadth and the openness of this platform is really unique in the marketplace. It's why so many customers have built custom integrations. It really becomes a tool for every workflow at your company. And that openness and really thinking of this as a platform, as a system of engagement for all of your internal tools and all of your external customer engagement, is truly unique.

Taylor is also a big fan of Slack Connect, which enables users to connect with up to 20 different organizations within the same Slack channel:

[It’s] that ability to create a channel with customers or partners [and] really not thinking about these new ways of working in a sort of myopic, internal way. It's not just about engaging with your colleagues; it's really about engaging with your customers, your partners. When you think about that ‘new normal' and the 'when you get an aeroplane and when you don't', Slack Connect is an incredibly powerful tool. [The Slack] management team has always been very clear about how strategic Slack Connect was to their growth and it was really important to us as we were looking at the opportunity of bringing these two platforms together.

Furthermore, there’s a data integration angle that appeals to Salesforce, building on its previous acquisition of MuleSoft, Taylor explains:

It just reflects the importance of data in building the customer 360 [degree view] and the importance of integrating all your legacy systems. Data is siloed right now. It's not that our customers don't have the data, they just don't have it in a connected way. [When] you walk into a contact center, there's a term I love which is ‘swivel chair integration’ - it means you're looking at every single app and screen [and[ relying on people to essentially make up for our failures in information technology. The opportunity for Slack is to not only unlock access to all your enterprise data when you're really trying to build a customer 360 [view], but also doing it in a really integrated way, right into the workflows of the employees who are actually having to provide that customer experience and make the strategic decisions.

I think it's very complementary with our vision for MuleSoft, which is, particularly for IT departments, as a platform for data integration. I think it really reflects, as a company, that when we're talking building a customer 360 [view], a single source of truth, it's inclusive of all of your enterprise architecture. It's inclusive whether you're building a custom data lake on Amazon Web Services or Azure; it's inclusive of all the other software that service applications use; it might be inclusive of the mainframe you can't get rid of. So we're really strategically thinking about data and integration is one of the key value propositions of Salesforce and our platform.

Solution sell

As for something that Salesforce can do for Slack, a point picked up by Phil Wainewright last year was a frequent lament by Slack CEO Butterfield that the product was “too hard to just pick up”. That’s something that will change as part of a wider solution sell by Salesforce. Taylor explains:

We don't bring these technologies to our customers as Lego bricks that they have to construct themselves. We say, 'We're gonna help you with your sales transformation and we'll use MuleSoft as the integration platform and use Tableau to help you see and understand all the data in your sales process so you can make better business decisions'. That orientation towards helping our customers with end-to-end solutions...is the way our customers want to consume the technology and a really great way to bring some of these technologies that [if] sold in isolation may be a less compelling standalone value proposition.

He adds:

One of the things that we really take pride in is not just being a vendor of software, but really trying to show up to our customers as a trusted digital advisor. I think that role of trust and our sort of consultative relationship with our customers is more important than ever before because transformations are uncomfortable and uncomfortably fast right now because of just the shifts in the economy.

Shifts that once again bring us back to the ‘new normal’ topic, a debate that we’ll be hearing a lot more about as a vaccinated 2021 rolls out. Then again, what’s normal anyway?

My take

As noted, the Slack takeover has yet to win regulatory approval. When/if it does, it is clearly intended to bring a lot to the table for Salesforce, as well it might given how much it’s costing. How that works out in terms of customer acceptance will only be seen over time. Salesforce has a good track record at making these big ticket acquisitions work, as seen in Tableau and MuleSoft. It now needs to pull the trick off again and with a high profile gambit that Wall Street will be watching very closely - and that’s one aspect of the ‘new normal’ that won’t be changing.