Microsoft to become the Facebook of enterprise collaborative chat

Despite Facebook’s huge consumer user base, Workplace by Facebook has most likely struggled to get off the ground because companies don’t see the need to adopt a paid business version of the social platform, especially  given stiff competition from competitors like Microsoft Teams and Slack.

If standalone chat apps such as Slack (which isn’t bundled as part of a productivity suite), can innovate in ways that others business chat apps can’t, they can survive and even thrive. For example, if Slack can continue to introduce new functionality and include more and better integrations with third-party apps than the competition, there will still be a niche for them to carve out. For example, not all organizations use G Suite or Office 365. Additionally, Spiceworks data shows that small businesses are most likely to adopt Slack, leading us to believe that the app might be best suited for companies with fewer employees, or their free offering may work well enough for smaller organizations. 

While Teams is replacing Skype for Business as the default chat client in Office 365, there’s still room for both apps to exist, as Teams has more of a focus on workplace group chat, while Skype is more about audio and visual communications. Also, Microsoft is releasing Skype for Business Server 2019, ensuring the app’s future for years to come, especially in enterprises that specifically want an on-premises install of the application. Additionally, the consumer version of the app will continue to use the Skype branding. Finally, some users believe that the communications features in Teams doesn’t measure up to the functionality in Skype for Business. For all of these reasons, it makes sense for the applications to say separate because many will still want to use Skype going forward.

Email has been around for decades, and despite its flaws, it continues to get the job done. Business chat apps aren’t perfect either. Cost as well as security are two potential factors preventing organizations from replacing email with chat. For example, according to Spiceworks data, only 30% of it pros believe that collaborative chat apps are cheaper than email. Additionally, 58% of IT pros agree that sensitive files and information should not be sheared through collaborative chat apps. 

The study focused on vendors that refer to themselves as primarily chat applications vs. other types of collaborative tools such as video conferencing, online meeting tools, etc.

Besides Teams continuing to grow at a rapid rate (largely due to the popularity of Office 365), we can expect all of the competitors to continue to introduce new functionality to remain competitive. For example, Google will evolve their Hangouts platform, having recently split the app into Chat and Meet platforms, which will focus on more Slack-like collaborative team chat and videoconferencing, respectively. Slack will have to continue to be innovative because most businesses use either Microsoft’s or Google’s productivity suites, which in many cases come bundled with their business chat applications at no additional cost. So in many ways, business chat app adoption will be a reflection of — or perhaps an extension of — the popularity of productivity suites. 

 Slack has already turned down many offers in the past, and Microsoft now has their own Slack competitor, an acquisition is not necessarily in the cards. Besides, it was rumored that Microsoft considered making an offer for Slack a few years ago, but ultimately decided not to.

There are open-source applications similar to Slack currently, with names like Mattermost and Rocket.Chat. But because Slack is simple to set up and offers a free version with enough functionality for many, potential users of these open-source competitors may not see the need to seek out alternatives.