Slack buys HipChat from Microsoft

Although HipChat preceded Slack, the younger company quickly added more features and attracted more users. (Image: Reuters)

Atlbadian Corp sells its chat software to compete with Slack Technologies Inc. and take a small stake in the start-up because they face greater competition from Microsoft Corp. Slack will pay an undisclosed amount over the next three years to acquire HipChat and Stride badets from Atlbadian, the leaders of both companies said. Slack CEO, Stewart Butterfield, described the payment and investment by Atlbadian in his company as "nominal" in financial terms but strategically important. He refused to elaborate on the first.

The deal gives Slack more customers, most of whom pay monthly service fees, and allows Atlbadian to leave a company that has failed to generate as many requests as expected. The combination of both activities strengthens Slack at a time when Microsoft is pushing a competing product called Teams to some 135 million Office cloud customers. Microsoft has introduced a free version of Teams this month with the goal of attracting people who are not subscribed to Office 365. Breaking out a competitor is good for Slack, said Butterfield: "There are fewer choices for the people."

Read also: Microsoft ups fight with Slack, steps progress of the professional chat team

The case allows each company to focus on the area where they lead -Slack in chat rooms and Altbadian in project management software. Both companies already share a lot of customers. Hundreds of thousands of groups using Atlbadian products like Jira and Trello have Slack accounts, said Atlbadian co-CEO Mike Cannon-Brookes. These include Capital One and NASA's Jet Propulsion Laboratory.

Atlbadian, who is expected to present the deal in a quarterly earnings report, said the impact of revenue losses would be largely offset by Slack's payments over the next three years. Although HipChat preceded Slack, the younger company quickly added more features and attracted more users. "Hipchat and Stride are not going as well as some other Atlbadian products," said Wayne Kurtzman, an badyst at IDC. Atlbadian shares jumped up to 18 percent in expanded trading following the news.

Also read: Slack adds 1 million paying users in growing competition

Atlbadian made a last effort less than a year ago to follow Slack and Microsoft in the chat software. In September, he attempted to move HipChat customers to a new product that combined more features than Slack and Microsoft added to their chat services. Called Stride, the application offers audio and video conferences and project tracking. When there were not enough users, Atlbadian had the idea of ​​a sale. "We are very proud of what the team has built," said Cannon-Brookes. "Two months ago, Atlbadian President Jay Simons met Butterfield for breakfast and asked him if he wanted to acquire the cat business," said Mr. Butterfield. In the past, the two companies had worked together on software projects and shared bakery and pastry products to celebrate product releases, said Mr. Cannon-Brookes. Atlbadian is making a strategic investment in another company, he said. "Atlbadian will continue to manage chat products and customers until the closure of cloud services in February." Customers with HipChat installed on their own servers will be able to use it for a few extra months or up to two years, depending on the version.

See also: Microsoft Publishes a Free Version of Teams to Take on Slack

Slack and Atlbadi Year will allow customers to move easily, but they will not be forced to change, said Butterfield. He expects, however, that most of them will change, adding "unique numbers" as a percentage of market share to Slack. Butterfield and Atlbadian refused to say how many people use HipChat and Stride. Microsoft claims that 200,000 organizations use teams. Slack said that there are 500,000, totaling 8 million people who use the service every day. Three million of these accounts are paid

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