Salesforce Customers Not Swayed by Slack, Analysts Say

Today, companies in the market for customer-relationship management software — Salesforce’s signature product — aren’t impacted one way or another except for messaging and collaboration features, said Liz Herbert, vice president and principal analyst at the information-technology research firm.

Forrester Research ink

“We don’t really see, when it comes to Slack, any demand moving from the Salesforce base to a tool like this,” Ms. Herbert said. “It hasn’t really become something compelling,” she said.

Carhartt Inc. Katrina Agosti, chief information officer of Salesforce.com, which uses Salesforce’s sales, service and marketing cloud, said the Slack acquisition hasn’t made Salesforce more useful or valuable to the company so far.

“We didn’t discover a more widespread use of Slack until after the acquisition,” Ms. Agosti said. Features and functions are similar to Slack

Microsoft

Teams, Microsoft Corp’s collaboration app, which the apparel company was already investing in and continues to use, he said.

Since the acquisition, Slack’s revenue growth has steadily declined. Salesforce reported $402 million in Slack subscription and support revenue in its fiscal third quarter ending October 31. That’s a quarter-on-quarter increase of 6.9%, but it reflects a deceleration from 9.3% growth in the second quarter and 11.7% growth. In the first quarter, based on revenue data from the company’s earnings report.

Meanwhile, on Wednesday Salesforce said it would lay off 10% of your workforce As consumers take a more cautious approach to spending.

“The Slack acquisition by Salesforce has not changed Salesforce’s trajectory, up or down,” said strategic consultant Tim Crawford, CIO at AVOA, a Los Angeles-based enterprise IT advisory firm. “CIOs are largely indifferent to acquisitions,” he said.

Salesforce said that about 80 of the Fortune 100 companies use Slack. “Our business has great momentum, growing 46% year over year last quarter, and customer retention is nearing records,” the company said.

Along with its earnings report in November, Salesforce announced that co-CEO Brett Taylor, a Champion of Sluggish Acquisition, will leave the company at the end of January, leaving chairman Marc Benioff as sole chief executive. Last month, Stewart Butterfield, chief executive and co-founder of Slack, said He plans to leave the company in JanuaryAlong with two other slacker officers.

In an internal message, Mr. Butterfield said the move was not related to Mr. Taylor’s departure and that he was leaving Slack in good shape. He added that there were “challenges ahead in dealing with an unusual amount of economic uncertainty and there is no doubt that this makes things difficult.”

Salesforce, which confirmed the plans get slack In December 2020, it was the leader in selling cloud-based customer relationship management software on a subscription basis. More recently, it has sought to expand into other areas of the enterprise IT market, such as data analytics and software-integration services—often through acquisitions—to compete with Microsoft, an enterprise software juggernaut.

Jason Wong, an analyst with IT research and consulting firm Jason Wong, said the move to bundle a wide range of IT software and services into a single platform could backfire, as CIOs and other corporate technology leaders take a closer look at spending.

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As the number of facilities grows, Mr Wong said, companies need to hire more technical staff to manage a wider range of equipment – ​​which can be very costly in an economy . “It’s really a struggle for customers to keep pace with a company like Salesforce,” he said.

Slack can still be purchased as a separate app outside of Salesforce’s CRM tools.

“The software industry has seen a lot of consolidation, and that has sometimes made contracting—and price negotiation—easier and simpler, and sometimes more difficult,” said Paul von Autenried, former CIO of Microsoft.

Bristol-Myers Squibb Co.

and is now an advisor on technical issues to executives and boards.

CIOs are also gearing up for uncertain markets reduce cloud costs and deleting unused apps. As such, incorporating Slack and other apps into CRM platforms can actually drive away buyers, Mr. Wong said.

Indeed, Salesforce and other technology providers have already started Fine-tuning cloud services for specific industriesA fit-to-fit approach known as Industry Cloud, which provides cloud-based software systems that are tailor-made for hospitals, banks and other businesses.

Forrester’s Ms. Herbert said the recent departures of Mr. Taylor and Slack executives may indicate that Salesforce is focusing on its core products. “So far the Salesforce acquisition effort has not provided a one plus one equals three result,” he said.

, Isabel Bousquette contributed to this article.

write to angus lowton at angus.Loten@wsj.com