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Why Amazon (and others) might want to acquire Slack

Why Amazon (and others) might want to acquire Slack

There’s not much of a dilemma as to why Amazon might consider buying Slack for $9 billion; just about any enterprise tech company with money to spend would interested in the promise of a platform like Slack’s.

Bloomberg reported late Wednesday that Amazon has been kicking the tires on a possible acquisition of Slack for around $9 billion, but some of the language used to describe the conversations makes it clear both parties are pretty early in the process and that Slack has received interest from other companies as well. With only 5 million daily active users and 1.5 million paying users, it might be hard at first to see why Slack would turn heads.

But Slack has carved out a very interesting position as we consider the future of workplace collaboration tools. Slack’s discussion and collaboration software is basically a dashboard for a lot of technology-oriented companies, hosting everything from water-cooler chats to urgent alerts about application performance.

Two prominent examples: Salesforce customers can access their Salesforce data through Slack via an application, for example. New Relic users can also sync alerts and monitor performance through Slack.

Slack’s Josh Wills told me in a prior life that 10 percent of Slack users spend eight hours a day (or more) engaged with the product, which is the kind of engagement usually seen on social media apps. Slack is a corporate productivity tool that people actually want to use, and that’s worth a lot of money to the right buyer.

Amazon Web Services could do a lot with Slack’s team in-house, giving its customers just another reason to keep their workloads in AWS with the integration tools the teams could build between the products. Slack’s designers might also be welcome as AWS starts to roll out services geared toward non-developers.

Microsoft might make even more sense if its Teams product fails to get off the ground; Microsoft reportedly expressed interest in Slack last year, but decided to focus on building its own software instead. And Google, of course, has some money to spend and a thirst for data, which Slack is generating by the boatload.

Slack isn’t yet a company on the order of LinkedIn, which Microsoft paid $26 billion to acquire last year in order to bring its 500 million registered users into the fold. But Slack is growing quickly: it had 4 million daily active users as of last October.

And Slack enjoys that rarest of qualities among technology products one is forced to use for work: people actually like it.

(Update: Recode reported Thursday morning after this published that Slack is also looking at raising $500 million, which implies it’s listening to anybody with money at this stage. We’ll see which path they choose.)

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