If Salesforce buys the hot workplace messaging firm Slack — as it has been in talks to do, according to a Wall Street Journal report Wednesday — it would be a direct shot at Microsoft and the popularity of its chat app, Teams. But the move would also puts pressure on another, less obvious competitor: Google Cloud.
By having Slack under its belt, along with data analytics company Tableau which it bought for $15.7 billion last year, Salesforce would be a newly powerful cloud platform rival, according to managing director of Wedbush Securities, Daniel Ives.
"If Salesforce acquires Slack, this would make them a formidable cloud platform player, combined with the Tableau acquisition," Ives told Business Insider.
While Google Cloud CEO Thomas Kurian has done a "commendable job" in the past year in growing the business, it is still "miles behind" Microsoft and AWS, Ives says. While an apples-to-apples comparison of the cloud businesses of Amazon, Microsoft, and Google is impossible because they each report about their cloud units in different ways, Google is widely seen as being in distant third. If Salesforce acquires Slack, it would essentially add another competitor more directly to the fray, Ives said.
And its the third place player — Google — that would feel the effects most: "What it does is it directly puts pressure on Google and Google Cloud Platform to increase functionality and the product footprint to keep up with the likes of Salesforce and Microsoft," he said.
While Google Cloud's Workspace product (formerly called G Suite) includes messaging features, Ives expects that Google would need to look for other avenues of growth and expects that it will look to acquire a collaboration software startup.
"This would also have a ripple impact for Google and its cloud endeavors and put more pressure on Kurian and GCP to do a collaborative cloud deal over the next 3 to 6 months to keep pace," Ives wrote in a note to client Wednesday.
It may not necessarily be a messaging startup, he said, but Google Cloud will want to expand its software offerings to better position itself against Microsoft and Salesforce.
Just last year, Google Cloud closed a $2.4 billion acquisition of the data analytics company Looker, which directly competes against Salesforce's Tableau. The time is "ripe" for major acquisitions, Ives says, and he expects more cloud software deals in 2021 generally.
Do you work at Google Cloud? Got a tip? Contact this reporter via email at rmchan@jkmperu.com, Signal at 646.376.6106, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request.
