SAN FRANCISCO — 5 years in the past, Marc Benioff negotiated to promote Salesforce, the software program firm he co-founded in 1999 and has run ever since, to Microsoft. If the deal had gone by means of, he would have been richly rewarded — however, ultimately, simply one other worker of the tech colossus.
With Tuesday’s information that Salesforce was shopping for Slack for $27.7 billion, Mr. Benioff did one thing far more tough. He’s now set to immediately compete in opposition to Microsoft, one of many world’s most useful firms, in its personal favored territory.
Microsoft has been slugging it out with Slack within the pandemic-fueled rush to allow distant collaboration by means of communications instruments. The quicker the character of labor transforms, the extra priceless victory will develop into, and the fiercer the competitors.
Mr. Benioff, 56, doesn’t seem like fazed. Or possibly he’s in denial. In a 30-minute interview after asserting the Slack deal and Salesforce’s earnings, he rejected all alternatives to speak about his historical past with Microsoft and even acknowledge its existence.
“What’s that firm?” he mentioned. “How do you spell it?”
Microsoft is sitting on a $137 billion money hoard and has a well-honed aggressive intuition. It will get 115 million customers daily for its would-be Slack killer, the Groups chat platform, due to the ubiquity of Microsoft Workplace. Salesforce, which makes a speciality of gross sales administration software program, had $9 billion in money this summer season. Slack, for all its brand-name familiarity, had solely about 12 million customers earlier than the pandemic. It has declined to replace its numbers.
Salesforce and Slack could be the underdogs right here, in case you can think about a $220 billion firm an underdog. However they’ve a not-so-secret weapon in Mr. Benioff. He realized some classes in showmanship from his mentor, the Apple co-founder Steve Jobs, together with find out how to flip information conferences into occasions and find out how to develop into the human embodiment of an organization.
“You’ve obtained to provide Benioff credit score. He’s constructed one of many greatest software program firms on this planet,” mentioned Mark Moerdler, a senior analysis analyst at Bernstein. “However this isn’t going to be straightforward.”
Earlier than the coronavirus pandemic compelled many to remain house, Salesforce was San Francisco’s largest personal employer, eclipsing the 168-year-old Wells Fargo. Its places of work had been in Salesforce Tower, a lipstick-shaped edifice that dominated the skyline and might be seen from across the bay.
Mr. Benioff, who has deep roots within the metropolis, likewise dominated native discourse, difficult the opposite tech chiefs to step up. He and his spouse, Lynne Benioff, contributed $100 million to a brand new kids’s hospital. In 2018, the couple purchased Time journal for $190 million. Forbes pegs Mr. Benioff’s web price at $9.4 billion.
The mogul could be getting weary of the eye. “Can’t you discover a extra fascinating and better-looking protagonist?” he requested.
Within the interview, Mr. Benioff couldn’t be dissuaded or turned except for his speaking factors: “Enterprise is the best platform for change … The way forward for our trade is a work-from-anywhere surroundings … I prefer to innovate, I prefer to create, I prefer to see issues and make them occur … I like that we maintain all stakeholders, not simply shareholders.”
The query of whether or not Mr. Benioff can pull off his problem to Microsoft is prone to develop into a long-term topic of fascination in Silicon Valley. Over the previous 20 years, Salesforce has acquired dozens of firms to increase its core merchandise. The largest acquisition earlier than Slack was Tableau, a knowledge visualization firm, which Salesforce purchased for $15.3 billion final 12 months.
Mr. Benioff as soon as even had the notion of shopping for Twitter, again in 2016. However it proved a step too far, though it might have been a wild journey. He’s an avid tweeter, a lot looser than most chief executives. On Monday, he tweeted an image of former President Barack Obama, who had a replica of Mr. Benioff’s e-book “Trailblazer” on the shelf.
“Wonderful style in books,” Mr. Benioff wrote.
Preliminary reactions to the Slack buy, which is a money and inventory deal, ranged from wildly enthusiastic to cautiously enthusiastic. Slack is dropping cash, whereas Salesforce’s collaborative instruments are weak.
“Marc has come full circle. From contemplating a sale to Microsoft, he’s now changing into the subsequent Microsoft,” mentioned Venky Ganesan, a managing director on the enterprise capital agency Menlo Ventures who makes a speciality of software program. Mr. Ganesan, who mentioned he knew Mr. Benioff solely as a enterprise acquaintance, saluted his means “to visualise a sure future after which make it occur.”
Daniel Newman, principal analyst at Futurum Analysis, has been vital of Salesforce previously however mentioned the Slack deal had an inexpensive likelihood of success.
“You might have a product in Slack that folks love however which hasn’t been marketed effectively,” Mr. Newman mentioned. “Salesforce and Benioff can provide it quicker development and extract untapped potential. Excuse the buzzword, however possibly that is actually a type of synergy moments.”
Apart from the query of Microsoft.
Mr. Benioff got here of age in Silicon Valley when Microsoft was decidedly the unhealthy man. His early employer, Oracle, was run by Larry Ellison, who had a long-running and infrequently bitter feud with the Microsoft co-founder Invoice Gates. As Salesforce grew, it had its personal scrapes with Microsoft over staff and patents.
After Satya Nadella grew to become Microsoft’s chief government in 2014, he and Mr. Benioff met and tried to work collectively. Mr. Benioff provided unsuccessfully to purchase Microsoft’s Dynamics software program line, which Salesforce competed with. When that concept foundered, he provided to promote Salesforce to Microsoft for $70 billion, about $22 billion over its market worth. A second try at a deal a number of months later didn’t work out, both.
The businesses grew to become that Silicon Valley perennial: “frenemies” that competed but additionally did offers. In 2016, each needed to amass the social networking web site LinkedIn, whose hundreds of thousands of employment histories provided a wealthy information trove. They bid in opposition to one another. Microsoft, with its deep pockets, received with a proposal of $26.2 billion. Mr. Benioff tweeted that it was “anticompetitive.”
Microsoft declined to touch upon Mr. Benioff.
Others weren’t so shy. Clara Jeffery, editor of Mom Jones journal, requested in a tweet on Tuesday evening what Mr. Benioff and Stewart Butterfield, Slack’s chief government, had been going to do “for the folks/communities affected by Covid collapse.” (Mr. Butterfield will proceed to steer Slack, which turns into an working unit of Salesforce.)
query, Mr. Benioff mentioned when he was requested about it. He went on to element his many acts of generosity and the way they had been “unprecedented for an organization of our measurement.”
He stayed on message to the top.
“Enterprise is the best platform for change, and we are able to all do extra to enhance the state of the world,” he mentioned. “The larger Salesforce will get, the extra it will probably do.”