The mascot here at Gadfly should be a doll of Amazon CEO Jeff Bezos laughing like a madman. His sorties into seemingly any nook of business keep us all guessing. And now Amazon is reportedly sniffing around Slack, the startup behind instant-messaging software that has become a Gif-packed essential for a growing number of office workers.
Why would Bezos hunt after Slack Technologies Inc., which could cost Amazon $9 billion or more? Insert shrug emoji here. But we can make some fun guesses by taking a trip inside the brain of Bezos.
First, he likes to play asset keep-away from competitors. Amazon.com Inc. snatched Diapers.com's parent company from Walmart in 2010. Amazon was an interloper again when Google was trying to buy video game-streaming startup Twitch in 2014. Amazon instead grabbed Twitch for $842 million, which for now is the second-largest acquisition in the company's history behind its $1.1 billion purchase of Zappos in 2009.
If Amazon is trying to play spoiler again, the most obvious victim is Microsoft Corp. Microsoft has considered buying Slack, and the software giant remains a natural potential acquirer. Bezos would no doubt love to make tears of Slack regret rain on Microsoft's Seattle-area headquarters, or at the very least drive up the purchase price for CEO Satya Nadella.
Microsoft has a truly terrible track record in acquisitions, but if it bought and successfully integrated Slack, it could pose a threat to Amazon's highly valuable Amazon Web Services cloud-computing business. Microsoft is the most serious competitor to AWS. And anything that strengthens Microsoft's hold over corporate technology -- Slack in theory would do that -- gives the company more leverage to pitch customers on Microsoft's Azure cloud products over AWS.
If Amazon is serious about going after Slack, it would also show the company is giving priority to its technology used by office workers and not only the invisible behind-the-scenes computing technology that make AWS a cloud monster. Amazon in the last few years has introduced email software for companies and other employee-facing technologies. My sense is these products haven't caught on widely, but Slack could change the game. Maybe.
The reason is that Slack is trying to become the hub for business life -- the way email is today. The centrality of email helped crown Microsoft the king of office technology. If an Amazon-owned Slack takes over as the software glue for work, it could make Amazon an even more formidable player in corporate technology. To be sure, Slack has a long way to go to usurp email. Email is the cockroach of technology. No matter how hard people try, it's impossible to wipe out the species.
More broadly, if Amazon (or Microsoft) succeed in buying Slack, it may also be the starter gun marking the end of business software's millennial generation.
The generation founded in the last 15 years -- including Slack, Dropbox, DocuSign, Workday, Atlassian, Zendesk and Box -- all make better software for companies or their workers than most of the garbage that came before. Many of them are thriving as public or private companies, but at this stage it's hard to imagine any becoming the next generation business software empires in the mold of Microsoft, Salesforce and Oracle.
Those companies became titans by having multiple hooks into workplace technology. They tended to start like Slack or Workday with a single product or two and then used that as the launchpad to create products to spread like kudzu into more and more of their customers' budgets. The younger generation is trying this blueprint, too, but it definitely isn't easy to become an essential technology for companies.
It's even possible there simply won't be Microsoft-sized business software empires in the future. Like consumers, corporations are changing how they use technology. They are willing to buy or use many disparate types as long as it all works relatively seamlessly together when they want it to -- like multiple apps on an iPhone.
This decentralized mode may be the future of business software. Or it may be that the business technology empires of the future will be built starting now by takeovers of software's millennial generation.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Many of the younger generation of private software startups also have valuation problems. I've written before that it feels hard for Dropbox to go public at anywhere close to its most recent valuation as a private company. Ditto for DocuSign, which is dealing with many cooks in its C-suite kitchen.
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