Amazon might buy Silicon Valley darling Slack for $9 billion - here's why it would be a smart move
If that report pans out, Amazon could pay as much as $9 billion.
Later, Recode's Kara Swisher reported that Microsoft, Google, and Salesforce might be looking to buy Slack, too.In the past, Slack CEO Stewart Butterfield has said that he's batted down many acquisition offers over the years , instead focusing on building the startup into an independent, sustainable company.
But assuming these rumblings are true, a Slack buy would be a seriously smart move for Amazon, above and beyond all the other potential purchasers. As the retailer ramps up its strategy for an assault on the dominance of Microsoft Office and Google Gsuite, the technology and talent at Slack could give Amazon a killer edge.
Slack declined to comment on reports that it's up for sale. Amazon did not respond to a request for comment at the time of publication.
Over the past 11 years, Amazon Web Services, the company's cloud computing arm, has grown into the single most profitable part of the entire business. With Amazon Web Services, software developers can host their wares in Amazon's own data centers, giving them pay-as-you-go access to fundamentally unlimited supercomputing power.
Amazon was the first serious player in this market, and it's still the biggest. By any and all accounts, Amazon Web Services is trouncing Microsoft Azure and Google Cloud Platform by a huge margin.
Well, Amazon wants to be the "everything store," and business software is a piece of everything. And so, Amazon has been quietly bolstering its offerings in this regard with services like Chime , a Skype competitor, with reports that the company is looking to expand those ambitions even further.
Which is where Slack comes in.
Slack, the product, fits exactly in with Amazon's office ambitions. It's basically a chat room for work, letting you collaborate with coworkers both near and far. And people love it - Slack CEO Stewart Butterfield recently told Business Insider that a significant portion of its considerable growth comes from simple word-of-mouth .
The success of Slack kickstarted a movement toward chat as a major market: Microsoft recently launched Teams, its own take on the concept, after Bill Gates himself reportedly talked the company out of trying to buy Slack outright. Google quickly followed suit with Hangouts Chat .
Amazon has the resources to build its own chat tool, make no mistake. With a Slack buy, however, Amazon would immediately gain a significant and secure position in the market, along with a fairly well-known brand that people generally approve of.
And that's not to mention the talent: At last count, Slack had over 800 employees at offices in San Francisco, New York City, and elsewhere, all focused on cracking the problem of office productivity. More recently, Slack has accelerated its efforts in artificial intelligence , figuring out user-friendly ways to make chat smarter.
Plus, if Amazon wanted or needed a leader in its push into the office, it could do worse than Butterfield himself, who led Slack's growth from nothing into a major player in less than four years.The final question, then, is whether or not Slack would sell. It's hard to tell without knowing more, but perhaps Slack sees a sale to Amazon as a way to make sure the company can stay competitive against Microsoft - Butterfield has made no bones of the fact that he sees Microsoft Teams as Slack's biggest threat.