Behind the Rivalry, Slack and Microsoft Have a Symbiotic Relationship
By Angus Loten
Microsoft Corp. and Slack Technologies Inc. are competing for a
piece of the workplace-collaboration market, but behind the scenes,
the companies are doing some collaborating of their own.
Slack's namesake software allows workers to send instant
messages, documents and images to individuals or groups without
resorting to email. Microsoft has a similar product called Teams
that was launched in 2017, bundled into Office 365, which also
includes Word, Outlook and Excel.
After Slack had its public-market debut in June, Microsoft said
Teams had 13 million daily users, putting it ahead of Slack's
reported 12 million.
Slack Chief Executive Stewart Butterfield shot back, saying more
than 70% of his company's top 50 customers also use Office 365,
suggesting that they prefer Slack to Teams.
As the rivalry played out in public, Slack over the past year
has been accessing bits of Microsoft's software that enables
different kinds of apps to work together, executives from both
Known as application programming interfaces, or APIs, these
pieces of software are made available by Microsoft to all outside
developers, including Slack and other rivals.
The process typically involves at least some back and forth
between engineers to fine-tune integrating their software.
Brian Elliott, Slack's vice president and general manager, said
the 10-year-old company is using Microsoft's open APIs to build
special versions of its workplace-collaboration tool that work with
Office 365 tools -- without the need to jump between programs.
Slack's integrations with Outlook and Calendar, launched in
April, enable users to receive and reply within Slack to emails
sent to their Outlook address, or to get alerts for upcoming
meetings or conference calls scheduled in Calendar.
"Switching apps is painful, Mr. Elliott said. "Integrating all
of these tools is hugely valuable."
Jared Spataro, a corporate vice president at Microsoft who
oversees Teams and other products, said Office 365 APIs "are public
and open to customers and all third-party developers."
He said providing access to outside software makers such as
Slack allows these companies to tap into Office tools and create
new apps that respond to customer demand.
Microsoft last year acquired the GitHub Inc. open-source
software repository for $7.5 billion, signaling its increasing
openness to third-party developers.
The approach to open-source software marks a strategic shift by
Microsoft under Satya Nadella, the company's chief executive
officer since 2014. Steve Ballmer, its former CEO, saw open-source
tools as a risk to intellectual property rights.
The interoperability of business apps is proving to be a strong
selling point with chief information officers, who are reluctant to
get locked into any one IT service provider, analysts say.
Open-source software and APIs allow them to build Lego-like
components from different tech vendors, creating a customized suite
of business tools.
The workplace-collaboration market is expected to reach $3.2
billion in annual sales by 2021, up from $2.4 billion last year,
according to International Data Corp.
In its latest quarterly results, Microsoft last month reported
that revenue from its commercial-cloud operations, which include
Azure computing services, Office 365 tools and other cloud
services, increased 36% from a year earlier to a record $11.6
In September, Slack said revenue for the quarter ended in July
rose 58% from a year earlier to $145 million.
Mr. Elliott said even though Slack and Microsoft are rivals in
the collaboration market, "at the end of the day, customers are
going to see value in using our tools together."
Write to Angus Loten at email@example.com
(END) Dow Jones Newswires
November 13, 2019 18:55 ET (23:55 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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