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Salesforce buying work-chat service Slack for $27.7 billion

ap photo In this 2019 file photo, Salesforce chairman Marc Benioff speaks during a news conference, in Indianapolis.

SAN RAMON, Calif. — Business software pioneer Salesforce.com is buying work-chatting service Slack for $27.7 billion in a deal aimed at giving the two companies a better shot at competing against longtime industry powerhouse Microsoft.

The acquisition announced Tuesday is by far the largest in the 21-year history of Salesforce. The San Francisco company was one of the first to begin selling software as a subscription service that could be used on any internet-connected device instead of the more cumbersome process of installing the programs on individual computers.

Salesforce’s flamboyant founder and CEO Marc Benioff hailed the “cloud computing” concept as the wave of the future to much derision initially.

But software as a service has become an industry standard that has turned into a gold mine for longtime software makers. Microsoft for one has developed its own thriving online suite of services, known as Office 365, which includes a Teams chatting service that includes many of the same features as Slack’s 6-year-old application.

Slack in July filed a complaint in the European Union accusing Microsoft of illegally bundling Teams into Office 365 in a way that blocks its removal by customers who may prefer Slack.

Microsoft also has been posing a threat to Salesforce’s main products, a line-up of tools that help other companies manage their customer relationships.

“For Benioff, this is all about Microsoft,” Wedbush Securities analyst Dan Ives said of Tuesday’s deal. “It’s just clear Microsoft is moving further and further away from Salesforce when it comes to the cloud wars.”

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