Salesforce surprised the tech industry on Monday by acquiring Quip, the productivity app founded by Facebook’s former CTO, Bret Taylor, for a reported $750 million.
In forms filed with the SEC, Salesforce reports that it is buying Quip with $582 million worth of stock, but TechCrunch’s Ingrid Lunden reports that there’s a cash component as well, which will bring the total up to about $750. (The SEC forms don’t specify that, mentioning only that, in addition to the stock, Salesforce will assume “other equity awards” as part of the deal.)
Make no mistake, this deal is Salesforce CEO Marc Benioff thumbing his nose at his rival-turned-partner-turned-rival-again, Microsoft. There’s a bonus nose-thumbing at Google, too.
That’s because Quip is on an express mission to replace Microsoft Office with a modern day version of a word processor and spreadsheet.
Quip’s big claim to fame is that it wants to kill email. Instead of creating a document and emailing it around or uploading it to Box and emailing a note about that around, Quip has chat built in to every document. And it integrates with Slack.
While Quip works with Microsoft Office and Google Apps, Quip was designed to be an alternative from the get-go and Taylor isn’t shy about saying so. Last month, he told Annie Gaus at San Francisco Business Times.
“Quip is a collaborative productivity suite intended to be the next generation of what Microsoft Office was in the previous generation.”
Why should Salesforce buy Quip?
As we previously reported, Salesforce Ventures, the company’s venture arm, had been a backer of Quip. So why buy the startup outright?
Because Benioff has a vision for the next generation of cloud software, where smart machine learning helps everyday people do their jobs.
That’s the same vision that Microsoft and Google has.
But in order to take this idea from vision to reality, those smart machines need data. Lots and lots of data. They need to know what you are working on, with who.
Right now, Salesforce has access to the data companies store on their customers. It’s main cloud product, customer relationship management, helps companies manage customer contacts and prospects.
But Microsoft is a huge competitor to Salesforce with its Dynamics CRM product, so it has access to similar sorts of data.
And with Microsoft’s immensely popular Office 365 cloud service, Microsoft also has access to the data stored in spreadsheets and documents.
In fact, during a short-lived period where Microsoft and Salesforce were friendly (and Microsoft talked about buying Salesforce), they integrated Salesforce’s products with Office 365.
That friendship has been severely strained with Microsoft’s enormous $26 billion purchase of LinkedIn, snatched out of Benioff’s hands.
So Salesforce wants its own document and spreadsheet software, and access the data people will store in them.
Microsoft is buying LinkedIn for the same reason Benioff wanted it: to have the data from LinkedIn’s professional network to create a next-generation of smarter sales apps.
If you want to know just how much Benioff had competition with Microsoft (and Google) on the brain when announcing the purchase of Quip, here’s a few of his retweets.
He retweeted this link from 2015 saying Quip was shaking up the industry and warning Microsoft and Google to take note:
He retweeted a review between the Offic3 365, Google Apps and Quip that put Quip on top:
He retweeted this:
And, just for fun, he retweeted a little barb at his classic rival Oracle, who made news last week with its $9 billion acquisition of NetSuite, the company founded during the same meeting with Larry Ellison that inspired Benioff to found Salesforce.