Salesforce (CRM) CEO Marc Benioff has a "$50 billion dream" for the company he founded 21 years ago, and the newly minted deal with Slack (WORK) is a big part of it.
On Tuesday, the software giant signed a definitive agreement to acquire popular messaging software platform Slack Technologies in a cash and stock deal worth $27.7 billion, making it Salesforce’s largest-ever acquisition. In an interview with Yahoo Finance late Tuesday, Benioff suggested his ambitions won’t stop there.
Benioff started Salesforce in 1999, and since then it’s become one of the top enterprise software companies in the world with a market cap greater than $219 billion. By 2018, Salesforce was doing $10 billion-plus in annual revenues, and now the founder wants to more than quadruple that amount.
"We're going to deliver over $25.5 billion next year in revenue. I've always had this $50 billion dream for Salesforce, so let's see us go there," the billionaire said.
The Slack deal, which was first reported last week, came as a surprise to some, given that Benioff said in August the company was "not in a good M&A environment," but suggested things could change.
Benioff admitted to Yahoo Finance that he didn't see the opportunity coming, but Salesforce president and COO Bret Taylor — who joined the company in 2016 — and Slack CEO Stewart Butterfield shared a "tremendous vision" with Benioff of the two companies coming together.
The deal is one of the largest of the year, and brings together two prominent tech brands that are pioneers in their respective sectors.
"This is one of the most exciting stories I've ever heard — and this story is a story of two companies coming together, and it's a 1+1=3 equation," Benioff said, who has called the combination "a marriage made in heaven."
‘Very cool and different’
According to Benioff, Salesforce's vision was to be a social enterprise. In Slack, he saw a "tremendous social interface" and, when combined with Salesforce's products, it would make its customers "much more productive" and able to work anywhere — especially as COVID-19 makes working from home a wider standard.
"Wow, the demonstration is incredible, and what I saw, I think, is going to just truly excite our customers, and they're going to have the ability to have a next-generation capability for their companies," the CEO added.
Salesforce Customer 360 allows the CRM provider to bring together fragmented parts of a business like sales, marketing, commerce, service, etc. into a single source to allow for those enterprises to make better and smarter decisions about their customers.
And according to Benioff, adding Slack as the new interface for Customer 360 is the "icing on the cake."
The billionaire explained that by ‘layering’ Slack technology will make 360 more collaborative and mobile. “You can automate any workflow. This is very cool and very different than anything I've ever seen. It's kind of a dream that I've always had that we could have this type of a user interface and now with Salesforce and Slack coming together we do," Benioff added.
What's more, he noted that 90% of Slack customers are already Salesforce customers. Benioff plans to nudge his other CEO friends to join Slack, and intends to leverage Salesforce's massive sales team to sell Slack.
For the third quarter, Salesforce reported revenue of $5.42 billion, up 20% year-over-year. The company expects to do $5.67 billion in the current quarter, Benioff noted.
"The sequential growth is extraordinary, and that gives us the ability because we're strong right now, we're hitting record revenues, record profit, record margins, record cash flows, that we have the ability to do something” like the deal with Slack, the CEO said.
“When you're strong, you want to take your company, your organization to another level. That's the opportunity. And we're going to take that opportunity,” he added.
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.
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