In the last few days two really interesting acquisitions caught my eye. The obvious one that hardly could be missed, is Slack being acquired by Salesforce for a whopping $27.7 bn, which, to put it into perspective, is $2.2 bn more than Salesforce forecasts as its revenue for the upcoming fiscal year.
The other interesting acquisition is social network behemoth Facebook plucking up Kustomer, a five-year-old company with origins in customer service. What is interesting about Kustomer is that the company promotes managing customer service from the customer (hence the name) angle and not coming from the ticket as the main entity. Kustomer has since positioned itself more into the CRM area, but still with a focus on service “CRM for customer service” and also implemented an AI to help with routing and the end-to-end handling of (simple) cases by chat bots.
Digging a little further, one can find that Snapchat also recently acquired voca.ai, another tech company that specializes in serving natural, human-like conversations.
Salesforce acquires Slack
I have already covered the acquisition of Slack by Salesforce, and so have many other analysts. Thinking a little longer about it, yes, Slack gives Salesforce capabilities that so far only Microsoft can offer, albeit the balance of Salesforce’s productivity suite (acquired with Quip) is no match for Microsoft Office. Using both, MS Teams and Slack, I think that, with all its deficiencies, MS Teams has functional advantages over Slack. And it comes as part of MS 365 (formerly known as MS Office).
On the other hand, Slack as part of Salesforce is giving Salesforce customers that are not yet committed to a collaboration platform a choice. This is especially true, if Slack comes as part of the package, i.e. without an own price tag. The latter is something that I doubt, looking at Slack being on an ARR of around $1 bn and growing, and purchased at nearly $28 bn, but let’s see.
But then, Slack gives Salesforce an edge over SAP and Oracle, neither of which has a comparable offer. Oracle has a strategic partnership with Zoom, which places them high in the video collaboration arena, while SAP has Jam and a strategic partnership with Microsoft.
What Slack mainly provides Salesforce with are two things:
- A leg into the SMB market.
- A conversational UI that offers text, voice, video along with searchable file sharing capabilities.
Facebook acquires Kustomer
At about the same time, Facebook acquired Kustomer. Kustomer was founded around the idea of offering better customer service. This shall be achieved by providing agents better insight into the customer and by making the customer and the conversations with the customer the leading entities. These conversations can happen on arbitrary communication channels. This is in contrast to the traditional way of placing the incident at the centre and referencing the customer to it. To round this off, Kustomer also developed intelligent routing and a chatbot solution that help routing those incidents that are not deflected by the chatbot to the right agent.
You do wonder why a company like Facebook needs a customer service solution?
Well, as Ingrid Lunden also wrote in her readable article on TechCrunch, Facebook makes a sizeable business with companies that have a good deal of their, oftentimes the only, digital identity on Facebook and Facebook owned platforms. These are also regularly interacting with their customers via Facebooks messenger or via WhatsApp. According to Facebook’s own press release, there are currently more than 175 million people who contact businesses via WhatsApp. Up to now, these businesses used, and can continue to use, third party services for customer interactions. Now they can use a Facebook owned service, too.
So, the value of Kustomer for Facebook is twofold:
- It can bring additional revenue streams, directly by the customer service offering, and indirectly, by making it easier for Kustomer customers to create advertisements on Facebook
- Facebook can capitalize on the increasing trend towards conversational user interfaces
The common theme
What do these seemingly different acquisitions have in common?
Both of them revolve around conversations as an important way of interaction between people. This is the natural continuation of texting and messaging having entered the mainstream some years ago, at first in consumer applications, and then more and more in business applications, too.
As I have written in my article about what can be done to make sales people not hate their CRM system, one key ingredient is to make the system “speak with people”, i.e. offer a communication channel that is natural for people and reduces the friction between the communication parties as much as possible (or at least does not create unnecessary additional ones). These communication channels are text and voice, and this preference is, of course, not limited to salespeople.
Or, as Shane Murphy-Reuter, SVP Marketing at Intercom, puts it: “Messengers are how we communicate in our daily lives. They’re also transforming how colleagues communicate at work and are increasingly becoming the primary channel between businesses and customers. Consumers prefer messengers because they’re fast, friendly and personal. The shift toward conversational technologies is accelerating because messengers help businesses build strong relationships with their customers by providing a friendly, quick and easy customer experience that’s just like a face-to-face conversation and makes online communication feel much more personal.”
What does this mean?
This is a question that goes far beyond the immediate consequences for Slack- or Kustomer customers.
The conversation is the new UI
These acquisitions show the acknowledgement of a trend that in my eyes has reached a tipping point. Customers — people — want to communicate with businesses and their representatives in a way that is natural to humans. They expect businesses offering this capability.
The necessary communication channels exist since the advent of social media and mobiles becoming mainstream. Technologies that help businesses scaling communications are there, too. Chatbots and conversational AI’s are coming of age and are maturing rapidly.
Businesses leaders who have not yet started to offer conversational user interfaces to customers (and employees alike) need to act fast in order to keep pace with the demand for this type of user interface. They need to start implementations on limited but relevant scale, learn and grow from there.
Vendors need to build, buy or partner to offer convincing own conversational capabilities throughout their solution stack, starting from where it matters most (to their customers). Missing out on this will have a negative impact on their relevance going forward.
The conversation is the new UI. Are you prepared for it?