"We get it, Slack. You own this playground. Now go play in the sandbox and let the grownups make some real money." - How we imagine Satya Nadella reacting to Slack's impudent open letter in the New York Times yesterday welcoming it to "the revolution" of workplace collaboration tools.
Microsoft released a new Office 365 feature yesterday called Microsoft Teams, intended to be a competitor to the new Facebook Workplace initiative and startup Slack, with which millennials everywhere are engaged in a serious love/hate relationship.
As flexible working situations become more and more the norm, workplace collaboration tools are getting to be ubiquitous. In industries like marketing and advertising, consulting, tech and media, Slack is as or more essential than once vital products like Microsoft Word. Many channel partners in these verticals are looking for ways to make money off of workplace collaboration tools, and Microsoft’s entry into this space will be intriguing to MS partners.
In response to the release, Slack did what many of us have wished so often we could do and took out a literal full-page ad in the New York Times welcoming Microsoft—the 40-year-old behemoth with annual revenue that tops $85 million—to a tiny space currently dominated by the 3-year-old startup.
It’s a bold move, and some have argued it wasn’t especially smart. Whether the marketing gambit pays off or not, it came off not so much as a David versus Goliath as a toddler sticking its tongue out at a grownup.
Slack has an established customer base, with a daily count of 4 million active users. But only about 1.25 million of those users pay for the service. Moreover, this is still a nascent market with a lot of room for growth, unlike, say, smartphones, which have pretty much reached market saturation. But most worrisome for Slack, Microsoft has 85 million monthly users of Office 365.
Rolling this offering into that software package is an automatic distribution method that gives Microsoft a big head start toward market domination—if, that is, it can compete with the usability and features of Slack, which oddly were one of the things the startup listed in its open letter as not important to success.
“First, and most importantly, it’s not the features that matter,” read the letter. “How far you go in helping companies truly transform to take advantage of this shift in working is even more important than the individual software features you are duplicating.”
There’s a point buried in there that the new workforce, which loves its remote capabilities and BYOD culture, is pushing enterprises toward a similarly flexible suite of IT capabilities, and that old-school rules no longer guarantee customer loyalty in an era of shadow IT. But it isn’t a new point, and considering Microsoft’s success with its cloud-based enterprise applications, it isn’t one that’s been lost on the tech giant.
And there are features Teams offers that Slack doesn’t that are already serving as differentiators. Videoconferencing capabilities within conversations, for example, or threaded conversations to more easily keep track of topics—both features that Slack says are in its future, despite protestations that “it’s not the features that matter.”
Slack is beloved by independent software developers and workers in niche or data-heavy industries for its open platform, which allows users to integrate hundreds of third-party apps and workflows into the system (as long as they’re Slack-approved, of course). As Slack pointed out in the letter, Microsoft doesn’t have a great reputation for being open.
“We know that playing nice with others isn’t exactly your MO, but if you can’t offer people an open platform that brings everything together into one place and makes their lives dramatically simpler, it’s just not going to work.”
It was a dig at Microsoft’s past, but not very appropriate for this situation as Teams allows third-party integrations, too. Whoops.
Slack’s third bit of advice to Microsoft is “you’ve got to do this with love.” What they mean by that is good customer service. “If you want customers to switch to your product, you’re going to have to match our commitment to their success and take the same amount of delight in their happiness.”
The letter closes with Slack welcoming Microsoft to “the revolution.” “We admire many of your achievements and know you’ll be a worthy competitor. We’re sure you’re going to come up with a couple of new ideas on your own too.”
MS-DOS. Windows. Office suite. Internet Explorer. Xbox. Office 365. Surface Studio.
We’re pretty sure they’ll come up with a few new things, too, Slack.