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>And now Slack are going to sell for $24 billion or more. I still can't quite grasp these acquisition numbers. At that price you expect Slack to generate 1.5-

by treis 6y ago

>And now Slack are going to sell for $24 billion or more. I still can't quite grasp these acquisition numbers. At that price you expect Slack to generate 1.5-2 billion in profit per year. That's 4 times their current revenue. When you factor in risk and time value of money it becomes more like 3+ billion per year. I just can't imagine a chat app driving that level of profit.

throwaway201103 6y ago
Especially since chat app users seem to be quite fickle. My workplace has been through about 6 chat platforms in the past 10 years.
- dlhavema 6y ago
  Wow. We've used slack since we started 4 years ago and have no plans of moving to my knowledge.. I've been there for about 94% of those 4 years too..
  - monkeybutton 6y ago
    I've seen Slack, HipChat, Slack (round 2), Flock, and now Teams in as many years, at the same employer. I can't even say anything snarky about the people making these decisions because they're so far up and removed from us developers, I don't know anything about them. The whole thing is just comical now.
ethbr0 6y ago
This isn't about a chat app: this is a platform valuation. Salesforce is betting that Salesforce + Slack is worth more than the aquisition price. And more than the cost of letting a competitor acquire it.
9erdelta 6y ago
I think it is a _little bit_ off to just consider Slack to be a chat app. Sure chat is the core function...One thing I find super valuable about Slack is that it is a searchable archive. When a new person joins a company, they have literally years and years worth of searchable content. This helps get up to speed, cuts down on time spent asking questions etc. I find myself searching Slack many times a day pretty much every day at work. Not to mention automated workflows, calendar, drive integration etc.
- gallamine 6y ago
  > When a new person joins a company, they have literally years and years worth of searchable content. IF your company is paying to preserve it. At my not-very-tiny employer we only pay for something like 1 year of retention. I have no idea if that's a legal or financial decision, but either way it seems like a dumb one.
  - learc83 6y ago
    Pretty sure that's a legal decision. The cheapest slack plan comes with unlimited backups from what I know.
    - fuzzer37 6y ago
      Just curious why this would be a legal decision? I can't think of any reason that keeping messages would be a bad thing.
      - saagarjha 6y ago
        You’re doing something wrong and don’t want it to be subpoenaed?
        awa 6y ago
        Its more about messages taken out of context or a banter about a competitor between 2 random ICs getting highlighted in a big case.
        thekyle 6y ago
        I believe the way Slack works is that old messages are kept but hidden unless you pay. So someone could still subpoena the old messages.
      - jhickok 6y ago
        If you are only required to keep data for one year and you keep it for 2 years, you can still be subpoenaed for that 2 year old data if you keep it. Thus, keeping data for longer than you are required is an increased business risk.
jrvarela56 6y ago
It's a chat app that integrates to most other services you use and ends up being the most extensive repository to all of the information shared inside your company. As someone who pays for Slack, it would be VERY hard to make a switch. The impact of this in retention and opportunity to monetize the 'integrate workflows' increases the multiplier. Salesforce has probably calculated how this opens up revenue to their existing product line and Slack itself is growing. I'm not saying this is science but is part of the rationale that goes into the price.
nthj 6y ago
Enterprise SaaS is “just an app” + a ton of integrations + SSO authentication with a bunch of systems + SOC2 level compliance (or better.) Combining all of these things into one offering is very difficult, and highly valued by both customers and the stock market.

by treis 6y ago

throwaway201103 6y ago

Especially since chat app users seem to be quite fickle. My workplace has been through about 6 chat platforms in the past 10 years.

dlhavema 6y ago
Wow. We've used slack since we started 4 years ago and have no plans of moving to my knowledge.. I've been there for about 94% of those 4 years too..
- monkeybutton 6y ago
  I've seen Slack, HipChat, Slack (round 2), Flock, and now Teams in as many years, at the same employer. I can't even say anything snarky about the people making these decisions because they're so far up and removed from us developers, I don't know anything about them. The whole thing is just comical now.

ethbr0 6y ago

This isn't about a chat app: this is a platform valuation. Salesforce is betting that Salesforce + Slack is worth more than the aquisition price. And more than the cost of letting a competitor acquire it.

9erdelta 6y ago

I think it is a _little bit_ off to just consider Slack to be a chat app. Sure chat is the core function...One thing I find super valuable about Slack is that it is a searchable archive. When a new person joins a company, they have literally years and years worth of searchable content. This helps get up to speed, cuts down on time spent asking questions etc. I find myself searching Slack many times a day pretty much every day at work. Not to mention automated workflows, calendar, drive integration etc.

gallamine 6y ago
> When a new person joins a company, they have literally years and years worth of searchable content. IF your company is paying to preserve it. At my not-very-tiny employer we only pay for something like 1 year of retention. I have no idea if that's a legal or financial decision, but either way it seems like a dumb one.
- learc83 6y ago
  Pretty sure that's a legal decision. The cheapest slack plan comes with unlimited backups from what I know.
  - fuzzer37 6y ago
    Just curious why this would be a legal decision? I can't think of any reason that keeping messages would be a bad thing.
    - saagarjha 6y ago
      You’re doing something wrong and don’t want it to be subpoenaed?
      - awa 6y ago
        Its more about messages taken out of context or a banter about a competitor between 2 random ICs getting highlighted in a big case.
      - thekyle 6y ago
        I believe the way Slack works is that old messages are kept but hidden unless you pay. So someone could still subpoena the old messages.
    - jhickok 6y ago
      If you are only required to keep data for one year and you keep it for 2 years, you can still be subpoenaed for that 2 year old data if you keep it. Thus, keeping data for longer than you are required is an increased business risk.

jrvarela56 6y ago

It's a chat app that integrates to most other services you use and ends up being the most extensive repository to all of the information shared inside your company. As someone who pays for Slack, it would be VERY hard to make a switch. The impact of this in retention and opportunity to monetize the 'integrate workflows' increases the multiplier. Salesforce has probably calculated how this opens up revenue to their existing product line and Slack itself is growing. I'm not saying this is science but is part of the rationale that goes into the price.

nthj 6y ago

Enterprise SaaS is “just an app” + a ton of integrations + SSO authentication with a bunch of systems + SOC2 level compliance (or better.) Combining all of these things into one offering is very difficult, and highly valued by both customers and the stock market.