Salesforce has acquired Quip, a collaboration tool akin to Google Docs with a dash of Slack, in a deal valued at $582 million not including the stake Salesforce Ventures already holds.
The big question: Why?
Now it's clear that collaboration is a key part of everything. Document management and swapping comments is key. Workflow, bots, and project management are also critical. But does Salesforce really need to duel in the document management space. Won't Microsoft Office and Salesforce commingle nicely -- as will Google Docs?
Meanwhile, Microsoft and Saleforce already outlined a tight integration with Office and CRM via Lightning components.
So, what should we make of the Quip deal? Here are a few thoughts.
While there are many directions Salesforce can take Quip, we believe this acquisition positions Salesforce, should it choose, to offer some business productivity tools (a market historically dominated by Microsoft's Office), while the collaboration, communication, and workflow management tools may address growing enterprise demand for centralized collaboration tools demonstrated by the rapid rise of collaboration start-up Slack. For example, Quip can enable sales teams/managers to collaborate on sales pitches, deals and more. We find the purchase of a vendor that fits nicely with business process tools - the market where Microsoft leads with Office - particularly interesting following the competitive bid between the two companies over LinkedIn, which we believe was motivated by the need for more sophisticated/machine learning empowered lead generation tools for both Salesforce and Dynamics CRM Online. It begs the question: is Microsoft friend or foe? We can see either, and while it remains to be seen, we are certainly seeing some early signs of cross-pollination.