Last week, and with much fanfare, Slack announced that it would sell itself to tech behemoth Salesforce for a whopping $27.7 billion. By many measurements, this should be an incredible achievement and success story. In reality, it represents a decisive about-face for Slack, which had previously made clear that, despite new competition from Microsoft’s largely copycat product Teams, it wanted to remain independent.
Our free market trades on the assumption that good, innovative products will prevail over less effective ones released by entrenched firms like Microsoft. But Slack’s decision to be acquired by Salesforce indicates that today, the exact opposite is true. Slack is but one of many stories in Silicon Valley of a “defensive” acquisition, where a company is no longer able to compete independently against the tech giants. These giants, armed with nearly limitless funds and extensive client relationships, frequently abuse their advantage and bully smaller upstarts into oblivion. Even Slack, which built an incredibly powerful product and operated with notorious efficiency, could not stay independent in a match-up against Microsoft. And if a company like Slack can’t stand up to the consolidation of corporate power, consumers’ ability to freely choose the best and most useful product is at risk.