Why Slack is right to be scared of Microsoft Teams

On the eve of Microsoft's November 2 event in New York, Stewart Butterfield, the co-founder of the San Francisco-based startup Slack, decided to do something decidedly not digital. He took out a full page ad, along with an accompanying blog post, in the 165-year old New York Times with the headline: "Dear Microsoft".

It reads: "Wow. Big news! Congratulations on today's announcements. We're genuinely excited to have some competition."

The sarcasm of the ad is palpable, as the startup used one of the oldest forms of native advertising to welcome the behemoth enterprise software vendor into a market it appears to see as its own.

The ad goes on to offer some pretty patronising advice, but it does admit: "It's validating to see you've come around to the same way of thinking. And even though — being honest here — it's a little scary, we know it will bring a better future forward faster."

What the ad does show is that Slack is pretty convinced internally that Microsoft Teams is a ripoff of its product. It continues: "You're not going to create something people really love by making a big list of Slack's features and simply checking those boxes."

"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."

Read next: Nine of the best enterprise collaboration software tools 2016: Slack, Workplace, Sharepoint and more

This is not Microsoft's first crack at enterprise communication and collaboration, and the software giant was even rumoured to be preparing a bid for Slack earlier this year.

Previously it had bought the "business social network" Yammer in 2012 for an eye-watering $1.2 billion and Skype in 2011 for $8.5 billion. Skype, of course, is a lot more than a messaging platform and the video and voice capabilities are where it really shines, however, the future of Yammer is less clear following the launch of Teams.

Yammer works more like Facebook than Slack, with users generally posting things rather than communicating in real time. It is nearly impossible to know how popular Yammer is, but sentiment seems to skew towards it not being a very popular product.

So, what is Microsoft Teams?

Microsoft calls Teams a "chat-based workspace" in Office 365. Each 'team' is like a Slack channel, where you can group employees together to discuss a topic and share and collaborate on documents. The advantage of Teams is that it naturally integrates with other Office 365 products like Word, Excel, Powerpoint, video conferencing with Skype and all of your files in Sharepoint.

Unlike the fairly stoic Skype for Business instant messaging platform, Teams comes complete with emojis, gifs and memes. Teams also allows for threaded chats. A common criticism of Slack is that chats can become disorganised, so finding a way to identify chats within chats would be a handy feature.

Integrations, integrations, integrations

While Teams will naturally work extremely well with Office products, it is increasingly important to integrate smoothly with all products as workers rely on more and more tools on a daily basis.

Slack said in its blog post: "The modern knowledge worker relies on dozens of different products for their daily work, and that number is constantly expanding. These critical business processes and workflows demand the best tools, regardless of vendor."

There are 750 apps in the Slack App Directory allowing for simple integrations with services like Twitter and GitHub. Microsoft says that it will have integrations with over 150 partners upon general availability early next year.

Despite the disparity in these numbers it is a strange swipe from a closed-source SaaS company like Slack, especially considering Satya Nadella's tenure as CEO has been a near-constant drive to open up Microsoft as a platform.

Slack wrote: "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."

My take

The truth is, with enterprise collaboration tools like this, the difference between the user experience will be minuscule. In an organisation of any size there will be people that like certain tools more than others, so the idea is to find one that works and to stick with it. However, because Teams is available to existing Office 365 users it is just another reason to stick with what they know.

Slack has been on a hot streak up to this point, growing to four million daily active users since the founders pivoted away from building a massive multiplayer game and into enterprise chat in 2009. The chat service admits that it is most popular in the technology and media industries, and has just 28 out of the Fortune 100 companies as customers. Office 365, on the other hand, has an existing user base of 85 million active monthly users.

It is not much of a leap of imagination to expect Slack's user growth to slow down. This might not be as a direct result of Microsoft's product, as much as a natural progression of the company as it rounds into maturity and the market becomes more crowded.

Copyright © 2016 IDG Communications, Inc.

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