This week, Salesforce announced that it would purchase messaging-company Slack for an eye-watering $27.7 billion. It’s one of the largest tech deals in recent history, up there with IBM’s $34 billion purchase of Red Hat and Facebook’s $19 billion deal for WhatsApp.
For its money, Salesforce is obtaining an ultra-popular messaging platform used by companies around the world. How Salesforce integrates Slack into its existing line of cloud-based marketing and analytics products is an open question, but it’s clear that the acquisition makes the company more of a rival to Microsoft, which has been trying to swallow up Slack’s market-share with Teams.
For Slack, the deal is probably a good one. Besides making its stockholders a little richer, Salesforce’s resources will likely allow it to compete more effectively on a feature-by-feature basis against the aforementioned Teams, which had the weight of Microsoft’s money and engineering prowess behind it. How this all ultimately pans out will depend on the skill of Slack’s engineering teams—which makes it worth asking how much those teams are paid.
For an answer, we can turn to levels.fyi, which crowdsources tech companies’ compensation data. As with other startups and relatively young companies, compensation is heavily weighted toward stock, especially as engineers climb the ranks. (Although crowdsourcing isn’t the most scientific way of determining compensation, the numbers that levels.fyi presents often align with other sources, so we’re inclined to trust it.)
How does Slack’s compensation compare to what software engineers are paid within the Salesforce mothership? Fortunately, levels.fyi can give us the data on that, too. Although base salary is comparable, the stock awards don’t seem nearly as large, which may reflect the fundamental differences between a relatively mature firm (Salesforce) and a plucky company that, despite being publicly traded, still retains the cultural DNA of a startup (Slack).
It’s also worth comparing the engineer compensation at both Slack and Salesforce to what their equivalents pull down at Microsoft, which will no doubt continue to act as the chief rival in the messaging space for quite some time to come. As you might expect, Microsoft’s salaries align much more strongly with those of Salesforce than Slack:
Of course, the whole business-messaging ecosystem might offer more than enough room for Teams, Slack, and other options to survive, at least according to some analysts. “Looking at the bigger picture, our research shows that on average, businesses use 5-6 communications apps—meaning there’s opportunity for consolidation in this space,” wrote Peter Tsai, senior technology analyst at Spiceworks Ziff Davis. “With usage of unified communications solutions expected to grow by 10 percentage points within two years and more than a third of organizations preferring to use an all-encompassing suite of communications solutions, there’s a desire among many organizations to shift from siloed apps to platforms which help keep data and workflows within a single unified stack.”
However the battle between Slack and Teams works out, it’s clear that Slack and Salesforce will need great engineers to remain competitive. Meanwhile, both Slack/Salesforce and Microsoft will need to keep an eye out for other competitors—because if the story of Slack has demonstrated anything, it’s that a cool app can come out of nowhere and dominate an industry.