Facebook & Microsoft Are Coming for Slack
Lately, Slack, a business-focused messaging platform provider, has consistently been in the news. Slack announced that it reached over 4 million daily active users (DAU), 5.8 million weekly active users, over 1.25 million paid users, and 33,000 paid teams, which translate into $100 million in annualized revenue. However, it is not as impressive as it sounds, especially for a company that doubled its users in 10 months and was valued at $3.8 billion when it raised $200 million in April.
Slack’s success of becoming the fastest growing business application ever, with more than 1.25 million customers paying to use the service is not anything to scoff at but when the figures are scrutinized carefully, it is inevitable to see significant growth slowing, for both total daily actives, which includes free accounts, and “paid seats,” where the cost is $6.67 and up for each account.
Considering that the company saw 50% DAU growth and 63% paid seat growth in the 5.5 months from December 2015 to May 2016, the grow rate of around 33% in daily users and paid seats in the last 5 months can be seen as a slight downfall, and something the company should be careful about as some big players are entering the market.
Facebook Workplace vs Slack
Facebook, for instance, has been eyeing the enterprise market for a while. Finally, the popular social media company just rolled out the Slack competitor Workplace, its enterprise collaboration service, and Workplace is quickly adding businesses to its portfolio. The company signed on 1,000 businesses during its trial phase, like the Royal Bank of Scotland. So what exactly is Workplace (formerly known as Facebook at Work)? It is an intra-office platform to keep employees connected, which is already being used internally by Facebook employees. Besides Facebook’s basic infrastructure such as News Feed, or the ability to create and share in Groups or via chat, in addition to the basic features such as Live, Reactions, Search, and Trending posts, the company also developed Workplace-only features such as a dashboard with analytics and integrations with single sign-on. It also identifies providers that allow companies to integrate Workplace with their existing IT systems, and Multi-Company Groups, shared spaces that allow employees from different organizations to work together in a safe and secure way.
When it comes to software integration, Slack has much more offering - around 746 integrations with a number of other cloud-based apps, to be exact - than the newbie WorkPlace’s limited options. More importantly, enterprise-grade security and advanced administrative qualities are priorities for many large companies so first, Workplace needs to overcome resistance by information technology departments. In my opinion, it is not an easy task for Facebook to convince businesses that the platform is safe for their business secrets, due to the general perception of the brand. On the other hand, Facebook’s global name recognition is not a factor considered lightly as Facebook smartly mirrors the layout of its consumer offering which creates familiarity and eliminates complexity.
The multibillion-dollar company is also making powerful partnerships to strengthen its hand against Slack. Box CEO Aaron Levie noted in a blog post that some of the Workplace integrations are coming to Box, including the ability to share large files with Workplace groups, as well as the ability to automatically add news feed posts and other content to Box.
Skype Teams vs Slack
Microsoft is building Skype Teams, a group messaging service that's similar to Slack, according to a report from Microsoft news blog MSPoweruser. Skype Teams mimics a lot of the features that made Slack so popular, including the ability to add channels, share files and privately message people. The new platform will also feature Threaded Conversations, which is a major feature that’s lacking on Slack. With Threaded Conversations, you can simply reply to a message on a channel by clicking on the reply button and anyone else can join the thread whenever they want — just like Facebook Comments, or Disqus Comments. Skype Teams will also reportedly enable Office 365 integration. An expanded beta may be coming in November, with a full release planned for January.
Actually, the tech titan Microsoft has already released a Slack competitor SharePoint app which launched this past spring.
Critics warn that an eventual downfall can be seen in customer retention as some conservative businesses find the casual, GIF-filled workplace chat app noisy and distracting which enables employees procrastination and low-value socializing, and some large organizations have trouble scaling. For example, last April the ride-hailing service Uber dropped Slack because the service could not handle the thousands of Uber employees trying to communicate simultaneously, according to people who work at both companies.
Salesforce and Google Drive Partnership
On the other hand, Slack doesn’t sit on its hands, when the big players are coming for it. Its game plan is to stay competitive with its third-party integrations. A month ago, slack and Salesforce partnered to integrate platforms in an effort to make team conversations about sales prospects and accounts in sync. Salesforce's Chatter and Slack will sync via either a /chatter or /slack command to get updates from either system. Slack is working with Salesforce’s strategic product alliances team, which partners with bigger and more mature companies like Microsoft, Cisco, AWS, and Box.
Google has recently added five new productivity features to its G Suite of apps, including Slack integration for Google Docs and Drive. With the Slack integration, users will bring files from Drive directly into a Slack conversation by just using the ‘+’ button that is presented on the app. They can also create new Docs, Sheets and Slides files right from Slack which will help the users not to have to keep switching between the apps. “Every Google Drive file you share in Slack is automatically indexed and searchable, so you can tap into your team’s collective knowledge and quickly find past conversations and files,” said Slack Team in a blog post.
The integration is very convenient especially for the users who use Google Docs and Sheets at work to share data.
Here’s What Slack Should Do
Messaging apps have evolved beyond simple text communication tools to include commerce, file sharing, artificial intelligence, and more. Since its launch, Slack has always been one of the most popular platforms in the space. However, the market finally lured the big players. Therefore, the company needs to strengthen its differentiator which is third-party apps connections - the company claims that the 746 apps in its App Directory get installed 415,000 times per month. Although this strategy would help Slack reserve its unique position in the market for a while, it is not sufficient to defeat its competitors in the long run as it will not take these multibillion-dollar companies very long to eventually catch up.
The quick win would be developing new tools and services in an effort to reduce procrastination and educate users on how to get the most out of the platform. Although a casual, youthful bottom-up approach might be what helped Slack thrive quickly in the first place, the company should step up its game before it’s too late and expand its role in the business software ecosystem so other companies’ new enterprise-facing offerings couldn’t have a leg-up against Slack. After all, the platform is not only designes to send messages but also to create a collaborative environment around integrated workflows, business processes, data streams, and applications as the Slack team expressed in the blog post.