Salesforce and Quip — Sometimes, a cigar is just a cigar

I’d never heard of Quip before today.

Then I read that Salesforce is buying Quip for $750M.

Hmm. Oh look, conspiracy theories! Fantasies! Random grabs at an explanation, any explanation, other than the bare fact that Salesforce just paid three quarters of a billion for a word processor. Why would they do such a crazy thing?

Maybe because it’s not so crazy.

With hardly an actual fact smudging the clear window of my own ignorance, I fired off a response to the story on Hacker News. But hey, maybe this deserves more thought?

Cut them some Slack

There are basically two significant players in the office productivity tools market right now — Microsoft Office, and Google Docs. Let’s coldly dismiss Google Docs first. Its only good features are that it’s cloud-native, and it’s simple. But for power users, it sucks. And Google has shown very little interest in growing Docs as a product. It’s a cheap toy, but a cheap toy does the job most of the time — as long as you’re not an enterprise power user.

MS Office, on the other hand… that’s the most successful enterprise monopoly since IBM invented the punchcard. For twenty years, they’ve ruled the corporate desktop with an iron fist, using Office not only to make hundreds of billions of dollars directly, but also to protect the Windows monopoly (RIP), and leverage other products into the enterprise. But as a product? It’s a little long in the tooth. A lot long. Office 365 is a step in the right direction, but it also makes them vulnerable. They haven’t quite dodged the mobile apps bullet yet, and balancing power use with a mobile-friendly face is nontrivial — and doing it in a backwards compatible way to the knowledge traditions of people who have worked with Office their entire careers is even harder. Word, Excel, and PowerPoint are dragons that need a lot of taming and training.

A few years back, Slack entered the messaging apps market. That looked completely foolish, a saturated market — which they then p0wn3d like a script kiddie. When I look at the “office productivity tools” market, I think of Slack. Could Quip be a Slack? Could be — if the product is right, and the enterprise sales force is in place to scale quickly — hmm, Salesforce!

Big game hunting

You know what would look great in the entrance to Salesforce headquarters? A bearskin rug shaped like Microsoft.

Salesforce is a top second-tier software company. They are extremely successful — but they’re not (yet) Apple, or Google, or Oracle… or Microsoft. What can they do to reach those rarified heights? Take out one of the existing players. Creating Salesforce (the product) and kicking off the enterprise SaaS movement was memorable, yes — but taking out Microsoft would be legendary. And capturing the enterprise productivity tools market, especially in conjunction with their existing monopoly on sales automation, would be a truly dominant market position.

It’s going to be very difficult. But if it works, Salesforce will become the most important provider in the enterprise. That’s how they can enjoy the decades of security that, say, Microsoft has enjoyed.

Reality check

Salesforce has become a pretty big company. It’s much harder for big companies to innovate. And maintaining the high growth investors expect, when you’re already generating billions in revenue, requires big new markets and big gambles. Is it a way for Salesforce to join the peerage of the greatest software companies? Sure. But it’s also a way to survive.

The internet is filled with conspiracy theories now. It’s an acquihire for the CEO. It’s Marc Benioff cashing in on his Series A check. Whatever. I prefer to see it at face value — they want a new, modern office productivity suite to compete directly with Microsoft.

Sometimes, a cigar is just a cigar.

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