Microsoft could crush Slack as Facebook crashed Snapchat

Slack, the preferred communication tool of technology workers, is giving way to its biggest rival, Microsoft Teams, which has made its way into popularity. In other words, Slack has the same problem as Snapchat, which has suffered from the relentless appropriation of its biggest rival Facebook, Facebook.

Slack's market share among the world's largest companies is largely stable, adoption rates are down and more of these companies say they plan to leave the service, according to a report. a new study by the ETR market research firm, which interviews information executives and other leaders of the world's largest organizations * where they plan to spend their company's technology budget.

According to the data, the teams are seeing an increase in their market share, relatively higher adoption rates and low defection rates.

In addition to disrupting Slack's stock, which has become very popular, the situation suggests that innovation is intensifying in the technology industry, which is increasingly dominated by only a few behemoths. Politicians, including Senator Elizabeth Warren (D-MA), have blamed companies for creating so-called "zones of destruction," where they acquire or kill all their competitors. The result is that the best ideas and products are concentrated in the large, existing technology companies, strengthening their dominance and potentially stifling future innovations.

Slack, which is currently trading below its opening price on the first day, has been beset by both small businesses hoping to improve it and by technology giants trying to copy and replace it. Microsoft, at one point, had even considered buying Slack. Nearly four years after the start of Slack, Microsoft launched Teams, which has since adopted many of its competitors' features, including the basic principle of creating an online office space for colleagues to collaborate and communicate.

The situation was similar with Facebook, which after failing to buy Snapchat, began to copy it, feature by feature. Facebook has acted with impunity because it is not really possible to protect software by copyright – you can only protect the code itself. Since products such as Slack and Microsoft Teams or Facebook and Snapchat are built on different platforms, the code for each of them is probably distinct, so the copy features are a fair game.

As Tony Wagner of Marketplace said, "there was more than one way to skin a cat, and more than one way to put a dog nose on your face." Snap was suffering from a competitor – and a copier – whose scope was much larger than his own.

And Microsoft already has the habit of marketing a product late, then copying it, undervaluing it and moving it to success. In 2015, Microsoft Power BI was launched to compete with Tableau, a data analysis and visualization company that went public a few years ago. Microsoft's cheaper data analysis option – although some have described it as less good – helped the price of the Tableau stock to fall.

Technical titans such as Microsoft, Google and Amazon have much larger existing user bases than new businesses with which they sometimes compete. These giants can also afford to charge less to beat the competition.

Here's how these factors have helped change the use of teams and Slack by large companies:

Overall, the share of new adoptions is down for the teams and for Slack, but the user base of the teams is much wider – so it is more likely that it represents a smaller share of the total users.

And of course, the ETR study is necessarily small, with only a few hundred respondents from large public and private companies mentioning their use of Slack or teams, so it is not definitive. Nevertheless, the trend is strong and is a warning signal for the new public Slack, who touted its adoption by "more than 65 Fortune 100 companies" in its stock market.

Slack declined to comment, citing his quiet period surrounding his public deposit.

A Microsoft spokesperson wrote about the report: "Customers see teams as an asset because they are part of Office 365, with a deep integration into other Office applications and services."

Another reason why teams use more and more quickly: Many companies already having Office 365, which includes basic products such as Word, Excel and OneDrive, in addition to the teams, the communication software in the middle of work is free.

"Large organizations have spent the last three years migrating to Azure [cloud services] and at Office 365, "said Recode Thomas DelVecchio, founder and CEO of ETR's parent company, Aptiviti. "They will go with the teams unless there is a dramatic difference between price and performance."

Indeed, the cost, as well as the integration with Office 365, were generally the main reasons given by the people interviewed as part of the ETR survey for the use of Teams over Slack. (Slack also has an Office 365 integration). The general consensus among respondents was that the teams were not as good as Slack, but that they had become much better than they were and that they were generally an acceptable solution.

Niel Nickolaisen, director of information at OC Tanner, an employee recognition company, recently transferred her entire company to teams to standardize her communications. Previously, he had wanted to tip everyone over Slack, but since the company had an existing business contract with Microsoft, Teams was almost free.

"It got to the point where the teams were tolerable as an alternative Slack," said Nickolaisen, who participated in the ETR poll, in Recode. "If they're basically close, almost free is convincing enough to make the change."

The big competitors of Slack will certainly contest his way, but his course is not impossible. It could focus on gaining more small businesses as customers and perhaps building on its popularity with early users and decision-makers.

For what it's worth, Snap and Tableau are doing well despite the competitive pressure of Facebook and Microsoft. Snap is trading up 160% this year – while remaining below the price offered – and the performance of its business has prompted several analysts to improve its stock. And Salesforce bought Tableau last month for $ 15.7 billion, a premium of about 45% on the market value of the company, all in the hope of securing the best price. attack Microsoft.

It is true that the desktop software market, worth $ 28 billion, has room for several competitors. But as we know, once a big tech company has taken a lead in a given market, it's hard to dislodge it.

* The organizations surveyed appear in Forbes Global 2000, the list of the 225 largest private companies established by Forbes, as well as the US government.

** ETR examined decreases and increases of 6% or more. Less than this was indicated as flat use.

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