Collaboration 2019: Teams, Slack and what’s coming

While Microsoft and Slack continue to battle it out at the top of the collaboration software market, a variety of forces could re-shape that fight in the year ahead.

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The booming team collaboration market is likely to continue booming in 2019 as companies roll out chat apps more widely across their operations.

With Microsoft leveraging the ubiquity of its Office suite to push Teams, and Slack doubling down on its still-evolving enterprise push, the two leaders in the market are likely to continue to try and one-up each other in the search for new customers. At the same time, a host of other firms, from Facebook to Google, Cisco and more, will continue to build out their own team chat platforms.

IDC, by the way, expects the collaboration market to generate $3.5 billion in revenues in the year ahead, up from $2.9 billion in 2018.

With that background in mind, here are some of the key trends analysts expect to see in 2019 when it comes to collaboration software.

Slack to ramp up enterprise push as IPO looms

2019 is set to be a significant year for Slack, with expectations rising for a Goldman Sachs-backed IPO on top of what has already been a busy 12 months. Slack in the past year has undertaken a string of acquisitions that expand the reach of its platform and continued to build on its enterprise-readiness, adding various features such as enhanced analytics, enterprise key management and a speedier desktop app.

But Slack has more to do, according to Raúl Castañón Martínez, senior analyst at 451 Research.

“For Slack…, [the priority] is to continue expanding their customer base with Enterprise Grid,” he said. “Their customer base is still very much along the lines of how they started, which is [deployment by] teams within a larger organization, or with smaller organizations.”

Given Slack’s interest in more wide-scale deployments across large enterprises, “I think they are still not where they would like to be.”

Adding shared channels for Enterprise Grid customers is a priority, said Angela Ashenden, Principal Analyst at CCS Insight. Though the feature is currently available for Slack's core product, technical challenges have delayed a wider launch so far.

“The challenge for Slack is to create a story that allows it to be supported at an enterprise level. A lot of that is going to be around security and scalability and how they handle cross-organization collaboration, as in organization-to-organization collaboration,” she said.

Slack also still has limitations in terms of its cloud hosting locations.

“That has to be one of the big things to sort out [in 2019] if they want to support enterprise. It is still U.S.-only for hosting for Slack, which is a big limitation for them,” said Ashenden.

Microsoft Teams gains ground; will it be more than a Skype for Business replacement?

Two years after its unveiling, Microsoft Teams has firmly established itself as a real rival to Slack. In the past 12 months, Teams has essentially replaced Skype for Business Online as Microsoft's central communications tool, and a free version is now available - a clear swipe at Slack, which has had sustained  success with its freemium model.

The app is now used by 329,000 organizations worldwide, Microsoft said during its 2018 Ignite conference, up from 125,000 a year earlier. (That’s still some way behind the 500,000 organizations touted by Slack.)

Thanks to Teams’ inclusion within the Office 365 product suite, it is likely a matter of time before Teams is the most widely used team chat app – though just how often it is actually used remains a cause of debate. Unlike Slack, Microsoft doesn't break out daily active user figures.

A recent Spiceworks' report claims that Teams is set for the fastest growth of all business chat apps over the next two years. The survey indicates that 41% of respondents expect to use Teams by 2020, compared to 18% for Slack.

There is plenty of room for improvement for Teams, too. Ashenden stressed that Microsoft can do more to encourage users to coordinate team work within the app.

“They have a massive penetration with Teams, but the problem is that a lot of that is Office 365 driven numbers. So it is being chosen by IT, but it is not necessarily being used by employees.

Furthermore, Teams in many cases is being used as a replacement for Skype for Business rather than for its team chat capabilities. “I think that over time that will start to become a bit of a challenge,” Ashenden said. “So they have to look at what it was originally designed for, the 'teams' piece of it, and develop that so that it is more competitive.”

She added that more can be done to integrate Teams into a user's workflow, which would require more third-party integrations and process automation “They have some of the piece in there with things like Flow, but at the moment it is a bit too challenging to do,” she said.

“If they don't go down that route, Teams will just be a replacement for Skype and if you want do all of those processes then you look to Slack. That will be the big priority that I would expect them to be working on next year.”

Ashenden sees a wider trend towards automation, as indicated by Slack’s acquisition of Missions and Trello’s recent purchase of Butler.

“Automation of personal workflows is a trend that we're seeing escalate rapidly in the enterprise collaboration space, with a recognition that collaboration technology needs to better fit into our way of working, rather than the other way around,” she said.

Team collaboration/unified communications overlap

Microsoft Teams reached “feature parity” with Skype for Business Online this year, essentially bringing unified communications (UC) capabilities to its team chat product. It has also added AI capabilities such as background blur and cloud transcription aimed at making users more comfortable with video.

“The popularity of video chat, whether you like it or not, is making its way into office norms,” said Wayne Kurtzman, a research director at IDC.

“The video and audio is getting better, and easier to use,” he said. “Expect more announcements around AI integration with video calls such as transcription, smart playback and task assignment.”

Castañón Martínez expects the team collaboration/UC overlap to continue and that could mean trouble for UC vendors, many of which have also developed their own team chat tools.

“There is definitely a shift from unified communications into team collaboration,” Castañón Martínez said. “I don't think that the strategy of some of the UC players is necessarily working to counter that, so the question I think is how much more will team collaboration keep chipping away from UC.”

He believes that some businesses could start to question whether they need unified communications for all their staff when they could simply rely instead on a tool such as Slack.

“There are some companies that because of the nature of their business, could be well suited for that,” Castañón Martínez said, such as startups or digital native companies. “Not just because they tend to be more tech-savvy or tech-oriented than other companies, but mainly because of the type of workers. If they have a higher percentage of knowledge workers, and they are in a stage where they might have a strong employee base of engineers and developers, it just makes sense because that is how they communicate. So, I think that we might see some shift in that sense.”

Market consolidation? Or opportunity for all?

Atlassian’s Stride app was the first major chat app to fall away from a fast-growing market that has seen an array of offerings emerge from vendors – both large and small – in recent years. This could be a sign of changing dynamics.

“The fact that even Atlassian, with all of its experience in the team chat space, decided that it is not somewhere it wanted to play is quite telling,” said Ashenden. “So we can expect to see more – consolidation is a big word – but more exits, let’s say.”

Castañón Martínez was referring to the decision in July by Atlassian to dump Stride and urge users to move to Slack. The decision caught Stride users off-guard, and eventually prompted Atlassian co-CEO Mike Cannon-Brookes to apologize.

One possible scenario: acquisitions. Ashenden noted that Slack acquiring task management app Asana is one such potential deal that would make sense, allowing Slack to play a greater in role in the management as well as communications around workplace productivity.

Acquiring Asana could be a better fit than building out its own features, she said.

“It would make more sense to partner with someone that already does it well and has a good audience,” she said. “And Asana, for me, that looks like the most likely option, because they already have strong integrations in place, they are one of the primary partners, they have a lot of common customers between the two companies. They have similar cultures as well …, which always makes a huge difference, so I think that would be logical.”

That said, as the market continues to grow, it is not a winner-takes-all world; there is opportunity for a variety of vendors.

“The team collaboration market still has a lot of room to grow. That means that there is an opportunity for other vendors, not just Slack,” said Castañón Martínez.

He points to relatively untapped segments of the workforce, such as frontline workers, who often rely on consumer tools to communicate and collaborate.

“Slack – and team collaboration in general – is mainly for knowledge workers and that is a specific segment. There are many, many other workers out there, and in terms of volume there are more service workers than knowledge workers,” he said.

“So I think it is just getting started. I don't discount other competitors that Slack has, even if they are much smaller right now; they could grow and become real challengers.”

And still, the future is bright for email

Claims that team chat tools would replace email appear to premature – for now, at least. According to Spiceworks’ survey, only 16% of IT professionals believe chat apps will replace email within three to five years. That’s compared to 25% who made the same prediction back in 2016.

So while Slack might be pinning its hopes on channels becoming the most common method of business communication, its acquisition of Astro is aimed at helping it build out its own email management capabilities, letting users reply to emails without switching between apps. It was not the only company to acquire email capabilities; Facebook Workplace snapped up RedKix.

“It’s not quite dead yet,” said Kurtzman. “Expect new ways to leverage emails in a team environment.”

Copyright © 2018 IDG Communications, Inc.

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