SAN FRANCISCO — Five 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 way 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 rather more tough. He is now set to straight compete in opposition to Microsoft, one of many world’s most precious firms, in its personal favored territory.
Microsoft has been slugging it out with Slack within the pandemic-fueled rush to allow distant collaboration by way of communications instruments. The sooner the character of labor transforms, the extra worthwhile victory will turn out to be, and the fiercer the competitors.
Mr. Benioff, 56, doesn’t look like fazed. Or perhaps he’s in denial. In a 30-minute interview after saying 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 company?” he stated. “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 day-after-day for its would-be Slack killer, the Teams chat platform, due to the ubiquity of Microsoft Office. Salesforce, which makes a speciality of gross sales administration software program, had $9 billion in money this summer time. 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 may be the underdogs right here, for those who can take into account a $220 billion firm an underdog. But 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 easy methods to flip information conferences into occasions and easy methods to turn out to be the human embodiment of an organization.
“You’ve got to give Benioff credit. He’s built one of the biggest software companies in the world,” stated Mark Moerdler, a senior analysis analyst at Bernstein. “But this is not going to be easy.”
Before the coronavirus pandemic compelled many to remain dwelling, Salesforce was San Francisco’s largest personal employer, eclipsing the 168-year-old Wells Fargo. Its places of work have been in Salesforce Tower, a lipstick-shaped edifice that dominated the skyline and could possibly 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 internet value at $9.4 billion.
The mogul may be getting weary of the eye. “Can’t you find a more interesting and better-looking protagonist?” he requested.
In the interview, Mr. Benioff couldn’t be dissuaded or turned other than his speaking factors: “Business is the greatest platform for change … The future of our industry is a work-from-anywhere environment … I like to innovate, I like to create, I like to see things and make them happen … I love that we take care of all stakeholders, not just shareholders.”
The query of whether or not Mr. Benioff can pull off his problem to Microsoft is prone to turn out to be 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 greatest 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. But it proved a step too far, though it might have been a wild trip. He is an avid tweeter, a lot looser than most chief executives. On Monday, he tweeted an image of former President Barack Obama, who had a duplicate of Mr. Benioff’s e-book “Trailblazer” on the shelf.
“Excellent taste in books,” Mr. Benioff wrote.
Initial reactions to the Slack buy, which is a money and inventory deal, ranged from wildly enthusiastic to cautiously enthusiastic. Slack is shedding cash, whereas Salesforce’s collaborative instruments are weak.
“Marc has come full circle. From considering a sale to Microsoft, he is now becoming the next Microsoft,” stated Venky Ganesan, a managing director on the enterprise capital agency Menlo Ventures who makes a speciality of software program. Mr. Ganesan, who stated he knew Mr. Benioff solely as a enterprise acquaintance, saluted his potential “to visualize a certain future and then make it happen.”
Daniel Newman, principal analyst at Futurum Research, has been vital of Salesforce previously however stated the Slack deal had an affordable likelihood of success.
“You have a product in Slack that people love but which hasn’t been marketed well,” Mr. Newman stated. “Salesforce and Benioff can give it faster growth and extract untapped potential. Excuse the buzzword, but maybe this is really one of those synergy moments.”
Except for 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 Bill Gates. As Salesforce grew, it had its personal scrapes with Microsoft over staff and patents.
After Satya Nadella turned 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 firms turned that Silicon Valley perennial: “frenemies” that competed but in addition did offers. In 2016, each wished to amass the social networking website LinkedIn, whose tens of millions of employment histories provided a wealthy information trove. They bid in opposition to one another. Microsoft, with its deep pockets, received with a suggestion 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 Mother Jones journal, requested in a tweet on Tuesday evening what Mr. Benioff and Stewart Butterfield, Slack’s chief government, have been going to do “for the people/communities suffering from Covid collapse.” (Mr. Butterfield will proceed to guide Slack, which turns into an working unit of Salesforce.)
A great query, Mr. Benioff stated when he was requested about it. He went on to element his many acts of generosity and the way they have been “unprecedented for a company of our size.”
He stayed on message to the top.
“Business is the greatest platform for change, and we can all do more to improve the state of the world,” he stated. “The bigger Salesforce gets, the more it can do.”