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For most users, Teams is free and is already embedded in a system used widely around the world. Yoffie says Slack’s chief challenge is the same one that other Microsoft competitors have faced: keeping a step ahead of a global giant that absorbs innovations.
Slack users seemed to like its features, Yoffie says.
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They figured Slack could be more readily adapted to a range of office software than Teams could. A year later, in July 2021, Slack was acquired by Salesforce, the world’s largest customer-relations management software company.īutterfield and Salesforce CEO Marc Benioff shared the same goal: Establish Slack as what Butterfield termed “the central nervous system” for workplaces. In the midst of the pandemic, Slack filed an antitrust complaint against Microsoft with the European Commission. Zoom use soared, Teams expanded, and Slack held its own. Business offices turned to remote work, and group communication made an enormous shift from largely in-person to online meetings. "New companies like Slack emerge with a great product, better than Microsoft has, and then Microsoft observes it, imitates it, and integrates it." Microsoft executives briefly considered buying Slack, but founder Bill Gates reportedly opposed the move. The company added the Slack-style Teams app to Office 365 in 2017.
The company hired its first sales teams to recruit large corporations.
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Butterfield invested heavily in customer service, providing a basic service for free and paid subscriptions to an advanced version.īy 2019, Slack had 88,000 paying customers and 10 million daily users. Slack made it easy for new customers to use, with a three-click signup and a bot driven by artificial intelligence that guided them through the app. There’s plenty of time to develop the competition and for new outcomes to emerge.” Microsoft plays catch up to SlackĬanadian entrepreneur and Flickr founder Stewart Butterfield launched Slack in 2014 as a work-team communications tool he hoped would be an “email killer,” as he put it. Most early Slack customers were engineers and software developers, who are accustomed to team messaging. Yoffie says that’s significant because all of Slack’s customers actively use the app, while Microsoft’s may or may not. But another number is more promising for Slack: 91 of the nation’s Fortune 100 companies had Teams, while 65 also had Slack. And every Office 365 customer automatically gets Teams, whether they use it or not. Microsoft has a 10 to one customer advantage as well-145 million compared to 12 million-as of April 2021. Even counting Salesforce’s $27 billion purchase price for Slack, “it’s still a 10 to one difference.” “So, you’re looking at a company that’s 200 times larger,” Yoffie says. And Microsoft is on track to take in more than $200 billion in 2022. While Slack’s revenue climbed twice as fast at 43 percent, Microsoft’s sales still dwarfed Slack’s $903 million. During the two-year period the case examines, Microsoft’s revenue jumped 18 percent to $168 billion in its 2021 fiscal year compared with 2020. On paper, Microsoft appears to have the upper hand. His co-authors include 2021 graduates Kriti Gupta, Mehek Punatar, Poonam Sacheti, and Poorvi Vijay. Yoffie and a group of MBA students at HBS used public information to analyze the competition in the case study Collaboration Wars: Slack vs. It’s the dream of both Microsoft and Salesforce.” “Can these collaborative software platforms become an operating system for the office-the centerpiece of how we do work? That is open at this point. “It is a dramatic story,” says Yoffie, the Max and Doris Starr Professor of International Business and Administration. The winner is anyone’s guess, says HBS Professor David Yoffie, who co-wrote the case. Now, a David-and-Goliath contest is underway, and the outcome could change how colleagues communicate, especially as remote work becomes a fixture in business.
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"Can these collaborative software platforms become an operating system for the office-the centerpiece of how we do work?"Įven with Salesforce’s extra muscle, Slack’s executives have puzzled over how to compete with a free rival, a new Harvard Business School case study illustrates. Microsoft, meanwhile, was finally able to draw users to Teams, the free business communication platform it introduced in 2017 as part of Office 365. The pandemic propelled Slack beyond its core following in the technology industry and piqued the interest of cloud computing giant Salesforce, which acquired the firm in 2021. When COVID-19 forced companies to send employees home two years ago, newly remote workers largely reconnected on two collaboration apps: Slack and Microsoft Teams.