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"as a result of the economy..." Salesforce raised the prices for Slack Pro Plan as well recently. Doesn't sound like something you'd do if the economy is that

"as a result of the economy..." Salesforce raised the prices for Slack Pro Plan as well recently. Doesn't sound like something you'd do if the economy is that bad... And i assume Salesforce revenue is going to decline this year since the economy is that bad, huh?

oneoff786 4y ago
This comment isn’t wise. It doesn’t hold generally. That being said, Salesforce does expect to increase profits and revenues and has stated it doesn’t anticipate problems with revenues.
ReaLNero 4y ago
I mean if raising the prices made them more money they would have done it earlier. Usually prices in recessions are raised in response to supply issues, resulting in less quantity supplied to such an extent that there is less profit overall. That's at least what a microeconomist would say. But it's clear that in this recession there's less startups, and thus less Slack customers, and so Slack's operating costs need to be distributed among fewer companies, resulting in higher per-unit costs.
- shapefrog 4y ago
  > prices in recessions are raised in response to supply issues, resulting in less quantity supplied However it is software, supply is infinity and incremental cost is 0. > But it's clear that in this recession there's less startups Its clear thus far in this recession, that more people than ever are in employment. Thus more slack customers. Inflation however ...
  - wink 4y ago
    Small nitpick, as it's not self-hosted but runs on their servers and bandwidth, the incremental cost is not zero. But I do think that just a single org with 10k people would probably not register as a lot.
    - shapefrog 4y ago
      Fair nitpick. Based on sticker price, a 10k org would only be ~$1mil in revenue for slack (maybe half that with a big org discount?). Really makes me wonder about the valuations like 30bn on total revenue of 1bn.
  - ReaLNero 4y ago
    It's clear that the fixed costs need to be paid among a fewer number of clients, so the prices increase. There is a difference between marginal costs and per-unit costs.
    - shapefrog 4y ago
      > It's clear that the fixed costs need to be paid among a fewer number of clients I am sorry but it is not at all clear. Has there been a drop in the number of slack customers? Number of people in work is up. Unless slack has become unappealing as a solution to its problem, that means number of subscribers up. If slack is unappealing as a product and people are switching to teams / google that is an entirely different issue. It is also possible that those fixed costs have increased and they are passing on those costs, while retaining whatever margin they have, as there is inflation out there.
sparrish 4y ago
Inflation is going crazy and costs are going up. That's the 'bad' in this economy right now. That's also likely why they raised prices and are having to cut benefits.
- jen20 4y ago
  “Having to” is doing a lot of work there. “Have chosen to” is the correct phrasing. Given the availability problems and generally poor quality Slack managed before, I can’t see this going well. They’re lucky the competition is Teams, another basket case.
  - metadat 4y ago
    They're also lucky HipChat got acqui-murdered.
idkman123 4y ago
The raise doesn’t even start until sept and people can prepaid to delay it for another year. Companies are laying off and we charge based on active users so at best we will come out flat.

oneoff786 4y ago

This comment isn’t wise. It doesn’t hold generally. That being said, Salesforce does expect to increase profits and revenues and has stated it doesn’t anticipate problems with revenues.

ReaLNero 4y ago

I mean if raising the prices made them more money they would have done it earlier. Usually prices in recessions are raised in response to supply issues, resulting in less quantity supplied to such an extent that there is less profit overall. That's at least what a microeconomist would say. But it's clear that in this recession there's less startups, and thus less Slack customers, and so Slack's operating costs need to be distributed among fewer companies, resulting in higher per-unit costs.

shapefrog 4y ago
> prices in recessions are raised in response to supply issues, resulting in less quantity supplied However it is software, supply is infinity and incremental cost is 0. > But it's clear that in this recession there's less startups Its clear thus far in this recession, that more people than ever are in employment. Thus more slack customers. Inflation however ...
- wink 4y ago
  Small nitpick, as it's not self-hosted but runs on their servers and bandwidth, the incremental cost is not zero. But I do think that just a single org with 10k people would probably not register as a lot.
  - shapefrog 4y ago
    Fair nitpick. Based on sticker price, a 10k org would only be ~$1mil in revenue for slack (maybe half that with a big org discount?). Really makes me wonder about the valuations like 30bn on total revenue of 1bn.
- ReaLNero 4y ago
  It's clear that the fixed costs need to be paid among a fewer number of clients, so the prices increase. There is a difference between marginal costs and per-unit costs.
  - shapefrog 4y ago
    > It's clear that the fixed costs need to be paid among a fewer number of clients I am sorry but it is not at all clear. Has there been a drop in the number of slack customers? Number of people in work is up. Unless slack has become unappealing as a solution to its problem, that means number of subscribers up. If slack is unappealing as a product and people are switching to teams / google that is an entirely different issue. It is also possible that those fixed costs have increased and they are passing on those costs, while retaining whatever margin they have, as there is inflation out there.

sparrish 4y ago

Inflation is going crazy and costs are going up. That's the 'bad' in this economy right now. That's also likely why they raised prices and are having to cut benefits.

jen20 4y ago
“Having to” is doing a lot of work there. “Have chosen to” is the correct phrasing. Given the availability problems and generally poor quality Slack managed before, I can’t see this going well. They’re lucky the competition is Teams, another basket case.
- metadat 4y ago
  They're also lucky HipChat got acqui-murdered.

idkman123 4y ago

The raise doesn’t even start until sept and people can prepaid to delay it for another year. Companies are laying off and we charge based on active users so at best we will come out flat.