Aug
23
2018
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Mixmax launches IFTTT-like rules to help you manage your inbox

Mixmax, a service that aims to make email and other outbound communications more usable and effective, today announced the official launch of its new IFTTT-like rules for automating many of the most repetitive aspects of your daily email workflow.

On the one hand, this new feature is a bit like your standard email filter on steroids (and with connections to third-party tools like Slack, Salesforce, DocuSign, Greenhouse and Pipedrive). Thanks to this, you can now receive an SMS when a customer who spends more than $5,000 a month emails you, for example.

But rules also can be triggered by any of the third-party services the company currently supports. Maybe you want to send out a meeting reminder based on your calendar entries, for example. You can then set up a rule that always emails a reminder a day before the meeting, together with all the standard info you’d want to send in that email.

“One way we think about Mixmax is that we want to do for externally facing teams and people who talk a lot of customers what GitHub did for engineering and what Slack did for internal team communication,” Mixmax co-founder and CEO Olof Mathé told me. “That’s what we do for external communication.”

While the service started out as a basic Chrome extension for Gmail, it’s now a full-blown email automation system that offers everything from easy calendar sharing to tracking when recipients open an email and, now, building rules around that. Mathé likened it to an executive assistant, but he stressed that he doesn’t think Mixmax is taking anybody’s jobs away. “We’re not here to replace other people,” he said. “We amplify what you are able to do as an individual and give you superpowers so you can become your own personal chief of staff so you get more time.”

The new rules feature takes this to the next level and Mathé and his team plan to build this out more over time. He teased a new feature called “beast mode” that’s coming in the near future and that will see Mixmax propose actions you can take across different applications, for example.

Many of the new rules and connectors will be available to all paying users, though some features, like access to your Salesforce account, will only be available to those on higher-tier plans.

Aug
22
2018
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Slack must use cash hoard to find new ways to keep competition at bay

It was quite a week for Slack, wasn’t it? The enterprise communications platform confirmed this publication’s earlier report that it had scored another $427 million investment on an over-the-moon valuation of over $7 billion. Slack took a market that had once been in the doldrums and turned it into something significant by making itself more than a communications tool.

It changed the game by making itself a work hub. Through APIs and UI updates, it has made it simple for countless third parties (like Evernote) to integrate with Slack and provide the long-sought workplace hub for the enterprise. Instead of task switching, you can work mostly in one place and keep your focus on your work.

It’s quite a value proposition and it has enabled Slack to raise $1.2 billion (with a b) across 11 funding rounds, according to data on Crunchbase. They have grown to 8 million daily active users. They boast 70,000 teams paying to use it. Whatever they are doing, it’s working.

Competing with corporate behemoths

That said, Slack’s success has always been a bit surprising because it’s facing off against giants like Microsoft, Facebook, Google, Cisco, Salesforce and many others, all gunning for this upstart’s market. In fact, Microsoft is giving Teams away for free to Office 365 customers. You could say it’s hard to compete with free, yet Slack continues to hold its own (and also offers a free version, for the record).

Perhaps that’s because it doesn’t require customers to use any particular toolset. Microsoft Teams is great for Microsoft users. Google Hangouts is great for G Suite users. You’re already signed in and it’s all included in the package, and there is a huge convenience factor there, but Slack works on anything and with anything and companies have shown there is great value in that.

The question is can Slack continue to play David to these corporate behemoths or will patience, bushels of cash on hand and a long view allow these traditional tech companies to eventually catch up and pass the plucky newbie. Nobody can see into the future, but obviously investors recognize it takes a lot of capital to keep up with what the competition is bringing to the table.

Expanding their reach

They also clearly have some confidence in the company’s ability to keep growing and keep the titans at bay or they wouldn’t have thrown all of that moolah at them. Up until now, they seem to have always found a way, but they need to step up if they are going to keep it going.

Alan Lepofsky, an analyst with Constellation Research, who keeps a careful eye on the enterprise collaboration market, says in a recent video commentary that it’s great they got all this money, but now that someone has shown them all of this dough, they have to prove they know what to do with it.

“For Slack to continue to be successful, they need to expand beyond what they are currently doing and really, truly redefine the way people communicate, collaborate, coordinate around their work. They need to branch out to project management, task management, content creation — all sorts of things more than just collaboration.”

What comes next?

Lepofsky says this could happen via a build or buy scenario, or even partnering, but they need to use their money strategically to differentiate the product from the hefty competition and stay ahead in this market.

The other elephant in the room is the idea that one of the competing mega corporations could make a run at them and try to acquire them. It would take a boat load of money to make that happen, but if someone had the cojones to do it, they would be getting the state of the art, the market share, the engineering, the whole package.

For now, that’s pure speculation. For now, Slack is sitting comfortably on a huge cash pile, and perhaps they should go shopping and expand their product set with their newly found wealth, as Lepofsky suggests. If they can do that, maybe they can keep the technology wolves from the door and make their way down the path to their seemingly inevitable IPO.

Aug
22
2018
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Evernote refines integrations with Slack and Salesforce

When you’re working in a key business tool like Slack or Salesforce, you don’t want to switch focus by opening up another application to pull additional information. Evernote Business has let you access Evernote content from these applications for some time, and today it announced some refinements to enhance those integrations.

The Slack integration had worked with the old slash commands to display Evernote content directly within Slack, but Slack has changed that to allow you to access applications like Evernote in a more visual way, says Erik Wrobel, chief product officer at Evernote.

“Earlier this year, Slack announced something called Slack Actions. It allows you to surface an application in a more visual way, so discoverability and ease of use is better to reduce friction,” he said.

Evernote embedded inside Slack. Screenshot: Evernote

Evernote has take advantage of this new capability in this release to get away from the command interface style that Slack had previously used and make it easier for their core knowledge workers to access Evernote content inside of Slack.

Users can take an Evernote note in Slack, which will then show up in Evernote automatically in a “Notes from Slack” folder. From there, users can edit the notes and move them to other folders (or tag them) to further organize them in any way they see fit. Similarly you can save a conversation you’re having in Slack to Evernote as a note and move it or edit from Evernote later on.

The Salesforce Connection

While Salesforce deals with structured systems of record, Evernote works with unstructured content and bringing the two together can be useful and powerful for users. Typically, a team member interacting with the customer on the phone or in the field, will take notes in Evernote, and they want to share that information with other members of the team in the Salesforce record, Wrobel explained.

The user who took the note can link one or more notes inside Salesforce, so they essentially become part of the customer record. The newer version improves the technical connections between the two cloud applications including the ability to “pin” a note to a record. What’s more, once a note is linked there is two-way sync, which means regardless of whether you change that note in Salesforce or Evernote, it will update in both places (because the integration is a live version of Evernote).

Evernote notes embedded in Salesforce record. Screenshot: Evernote

Evernote also surfaces related content automatically at the bottom of the customer record to help users find other Evernote subject matter connected to the record. While you can’t link a note to Salesforce directly from Evernote yet, that is a requested feature and Wrobel said they are working on it for a future release.

These updates are available today for Slack and Salesforce customers using Evernote Business.

Aug
07
2018
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Slack is raising $400M+ with a post-money valuation of $7B or more

Slack — the app that lets coworkers and others in professional circles chat with each other and call in data from hundreds of integrated apps in the name of getting more work done (or at least procrastinating in an entertaining way) — has been on a growth tear in the last few years, most recently passing 8 million daily active users, 3 million of them paying. Now, the company is planning to capitalise on that with some more funding.

TechCrunch has learned that Slack is raising another round, this time in the region of $400 million or possibly more, with a post-money valuation of at least $7 billion — adding a whopping $2 billion on top of the company’s last valuation in September 2017, when SoftBank led a $250 million round at a $5.1 billion valuation.

We’ve heard from multiple sources that a new investor, General Atlantic, is leading this round, with possibly another new backer, Dragoneer, also in the mix. It’s not clear which other investors might be involved; the company counts no less than 41 other backers on its cap table already, according to PitchBook. (You might even say Several People Are Funding…) We also don’t know whether this round has closed.

At $400 million, this would make it Slack’s biggest round to date. That size underscores a few different things.

First, it points to the existing opportunity in enterprise messaging. Consumerisation has taken hold, and apps that let users easily start and carry on a mix of serious and diverting conversations, infused with GIFs or whatever data they might need from other applications, are vying to replace other ways that people communicate in the workplace, such as email, phone conferences and in-person chats, even when people are in the same vicinity as each other. With consumer messaging apps like WhatsApp topping 1.5 billion users, there’s plenty of room for enterprise messaging to grow.

Second, the round and valuation emphasize Slack’s position as a leader in this area. While there were other enterprise social networking apps in existence before Slack first launched in 2013 — Yammer, Hipchat and Socialcast among them — nothing had struck a chord quite as Slack did. “Things have been going crazy”, was how co-founder and CEO Stewart Butterfield described it to me when Slack exited beta: teams trialling it were seeing usage from “every single team member, every day.”

That growth pace has continued. Today, the company counts 70,000 paid teams including Capital One, eBay, IBM, 21st Century Fox, and 65 percent of Fortune 100 companies among its bigger users; and with customers in 100 countries, half of its DAUs are outside North America (UK, Japan, Germany, France and India are its biggest international markets).

But thirdly — and this could be key when considering how this funding will be used — Slack is not the only game in town.

Software giant Microsoft has launched Teams, and social networking behemoth Facebook has Workplace. Using their respective dominance in enterprise software and social mechanics, these two have stolen a march on picking up some key customer wins among businesses that have opted for products that are more natural fits with what their employees were already using. Microsoft reported 200,000 paying organizations earlier this year, and Facebook has snagged some very large customers like Walmart.

Slack’s bottom-up distribution strategy could give it an edge against these larger companies and their broader but more complex products. The lightweight nature of Slack’s messaging-first approach allows it more easily be inserted into a company’s office stack. Nearly every type of employee needs office messaging, creating the potential for Slack to serve as an identity layer for enterprise software, not to mention the platform where not only people, but the information that exists in separate apps, converges. Its own Slack Fund invests in potential companies that plug in, as the company hopes to build an ecosystem of partners that can fill in missing functionality.

AUSTIN, TX – MARCH 15: Stewart Butterfield, CEO of Slack speaks onstage at ‘Stewart Butterfield in Conversation with Farhad Manjoo’ during the 2016 SXSW Music, Film + Interactive Festival at Austin Convention Center on March 15, 2016 in Austin, Texas. (Photo by Mindy Best/Getty Images for SXSW)

Alongside dozens of other, smaller rivals offering comparative mixes of tools, it’s no surprise that last month Slack tightened up its bootlaces to take on the role of consolidator, snapping up IP and shutting down Hipchat and Stride from Atlassian, with the latter taking a stake in Slack as part of the deal.

Slack, which has a relatively modest 1,000+ employees, has ruled out an IPO this year, so this latest round will help it shore up cash in the meantime to continue growing, and competing.

Contacted for this story, Slack said that it does not comment on rumors or speculation.

Aug
07
2018
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Slack is raising $400M+ with a post-money valuation of $7B or more

Slack — the app that lets coworkers and others in professional circles chat with each other and call in data from hundreds of integrated apps in the name of getting more work done (or at least procrastinating in an entertaining way) — has been on a growth tear in the last few years, most recently passing 8 million daily active users, 3 million of them paying. Now, the company is planning to capitalise on that with some more funding.

TechCrunch has learned that Slack is raising another round, this time in the region of $400 million or possibly more, with a post-money valuation of at least $7 billion — adding a whopping $2 billion on top of the company’s last valuation in September 2017, when SoftBank led a $250 million round at a $5.1 billion valuation.

We’ve heard from multiple sources that a new investor, General Atlantic, is leading this round, with possibly another new backer, Dragoneer, also in the mix. It’s not clear which other investors might be involved; the company counts no less than 41 other backers on its cap table already, according to PitchBook. (You might even say Several People Are Funding…) We also don’t know whether this round has closed.

At $400 million, this would make it Slack’s biggest round to date. That size underscores a few different things.

First, it points to the existing opportunity in enterprise messaging. Consumerisation has taken hold, and apps that let users easily start and carry on a mix of serious and diverting conversations, infused with GIFs or whatever data they might need from other applications, are vying to replace other ways that people communicate in the workplace, such as email, phone conferences and in-person chats, even when people are in the same vicinity as each other. With consumer messaging apps like WhatsApp topping 1.5 billion users, there’s plenty of room for enterprise messaging to grow.

Second, the round and valuation emphasize Slack’s position as a leader in this area. While there were other enterprise social networking apps in existence before Slack first launched in 2013 — Yammer, Hipchat and Socialcast among them — nothing had struck a chord quite as Slack did. “Things have been going crazy”, was how co-founder and CEO Stewart Butterfield described it to me when Slack exited beta: teams trialling it were seeing usage from “every single team member, every day.”

That growth pace has continued. Today, the company counts 70,000 paid teams including Capital One, eBay, IBM, 21st Century Fox, and 65 percent of Fortune 100 companies among its bigger users; and with customers in 100 countries, half of its DAUs are outside North America (UK, Japan, Germany, France and India are its biggest international markets).

But thirdly — and this could be key when considering how this funding will be used — Slack is not the only game in town.

Software giant Microsoft has launched Teams, and social networking behemoth Facebook has Workplace. Using their respective dominance in enterprise software and social mechanics, these two have stolen a march on picking up some key customer wins among businesses that have opted for products that are more natural fits with what their employees were already using. Microsoft reported 200,000 paying organizations earlier this year, and Facebook has snagged some very large customers like Walmart.

Slack’s bottom-up distribution strategy could give it an edge against these larger companies and their broader but more complex products. The lightweight nature of Slack’s messaging-first approach allows it more easily be inserted into a company’s office stack. Nearly every type of employee needs office messaging, creating the potential for Slack to serve as an identity layer for enterprise software, not to mention the platform where not only people, but the information that exists in separate apps, converges. Its own Slack Fund invests in potential companies that plug in, as the company hopes to build an ecosystem of partners that can fill in missing functionality.

AUSTIN, TX – MARCH 15: Stewart Butterfield, CEO of Slack speaks onstage at ‘Stewart Butterfield in Conversation with Farhad Manjoo’ during the 2016 SXSW Music, Film + Interactive Festival at Austin Convention Center on March 15, 2016 in Austin, Texas. (Photo by Mindy Best/Getty Images for SXSW)

Alongside dozens of other, smaller rivals offering comparative mixes of tools, it’s no surprise that last month Slack tightened up its bootlaces to take on the role of consolidator, snapping up IP and shutting down Hipchat and Stride from Atlassian, with the latter taking a stake in Slack as part of the deal.

Slack, which has a relatively modest 1,000+ employees, has ruled out an IPO this year, so this latest round will help it shore up cash in the meantime to continue growing, and competing.

Contacted for this story, Slack said that it does not comment on rumors or speculation.

Jul
26
2018
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Slack forms key alliance as Atlassian throws in the towel on enterprise chat

With today’s announcement from Atlassian that it was selling to Slack the IP assets of its two enterprise communications tools, HipChat and Stride, it closes the book on one of the earliest competitors in the modern enterprise chat space. It also was a clear signal that Slack is not afraid to take on its giant competitors by forming key alliances.

That the announcement came from Slack co-founder and CEO Stewart Butterfield on Twitter only exacerbated that fact. Atlassian has a set of popular developer tools like Jira, Confluence and Bitbucket. At this point, HipChat and Stride had really become superfluous to the company and they sold the IP to their competitor.

Not only is Slack buying the assets and Atlassian is effectively shutting down these products, Atlassian is also investing in Slack, a move that shows it’s throwing its financial weight behind the company, as well, and forming an alliance with them.

Slack has been burning it up since in launched in 2014 with just 16,000 daily active users. At last count, in May, the company was reporting 8 million active users, 3 million of which were paid. That’s up from 6 million DAUs and 2 million paid users in September 2017. At the time, the company was reporting $200 million in annual recurring revenue. It’s a fair bet with the number of paid users growing by one-third at last count, that revenue number has increased significantly, as well.

Slack and products of its ilk like Workplace by Facebook, Google Hangouts and Microsoft Teams are trying to revolutionize the way we communicate and collaborate inside organizations. Slack has managed to advance the idea of enterprise communications that began in the early 2000s with chat clients, advanced to Enterprise 2.0 tools like Yammer and Jive in the mid-2000s and finally evolved into modern tools like Slack we are using today in the mobile-cloud era.

Slack has been able to succeed so well in business because it does much more than provide a channel to communicate. It has built a platform on top of which companies can plug in an assortment of tools they are using every day to do their jobs, like ServiceNow for help desk tickets, Salesforce for CRM and marketing data and Zendesk for customer service information.

This ability to provide a simple way to do all of your business in one place without a lot of task switching has been a Holy Grail of sorts in the enterprise for years. The two previously mentioned iterations, chat clients and Enterprise 2.0 tools, tried and failed to achieve this, but Slack has managed to create this single platform and made it easy for companies to integrate services.

This has been automated even further by the use of bots, which can act as trusted assistants inside of Slack, providing additional information and performing tasks for you on your behalf when it makes sense.

Slack has an otherworldly valuation of more than $5 billion right now, and is on its way to an eventual IPO. Atlassian might have thrown in the towel on enterprise communications, but it has opened the door to getting a piece of that IPO action while giving its customers what they want and forming a strong bond with Slack.

Others like Facebook and Microsoft also have a strong presence in this space and continue to build out their products. It’s not as though anyone else is showing signs of throwing up their hands just yet. In fact, just today Facebook bought Redkix to enhance its offering by giving users the ability to collaborate via email or the Workplace by Facebook interface, but Atlassian’s acquiescence is a strong signal that if you had any doubt, Slack is a leader here — and they got a big boost with today’s announcement.

Jul
10
2018
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Slack wants to make search a little easier with search filters

Slack’s search functions are getting another little quality-of-life update today with the introduction of filters, which aims to make search a little more granular to find the right answers.

The company also says searches are going to be more personalized. All of this is an attempt to get to the right files or conversations quickly as Slack — a simple collection of group chats and channels that can get out of hand very fast — something a little more palatable. As companies get bigger and bigger, the sheer amount of information that ends up in it will grow faster and faster. That means that the right information will generally be more difficult to access, and if Slack is going to stick to its roots as a simple internal communications product, it’s going to have to lean on improvements under the hood and small changes in front of users. The company says search is now 70 percent faster on the back end.

Users in Slack will now be able to filter search results by channels and also the kinds of results they are looking for, like files. You can go a little more granular than that, but that’s the general gist of it, as Slack tries to limit the changes to what’s happening in front of users. Slack threads, for example, were in development for more than a year before the company finally rolled out the long-awaited feature. (Whether that feature successfully changed things for the better is still not known.)

Slack now has around 8 million daily active users, with 3 million paid users, and is still clearly pretty popular with smaller companies that are looking for something simpler than the more robust — and complex — communications tools on the market. But there are startups trying to pick away at other parts of the employee communications channels, like Slite, which aims to be a simpler notes tool in the same vein as Slack but for different parts of the employee experience. And there are other larger companies looking to tap the demand for these kinds of simpler tools, like Atlassian’s Stride and Microsoft’s Teams.

May
22
2018
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Slack introduces Actions to make it easier to create and finish tasks without leaving

As Slack tries to graduate beyond a Silicon Valley darling to the go-to communications platform within a company, it’s had to find ways to increasingly pitch itself as an intelligent Swiss Army knife for companies — and not just a simple chat app — and it is trying to continue that today once again with a new feature called Actions.

Companies can now bake in a user experience of their own directly into the Slack application that isn’t yet another chatbot that’s tied into their services. Developers can essentially create a customized prompt for any kind of action, like submitting a support ticket, within the Slack core chat experience through a drop-down window called an Action. While Slackbots may have been an early incarnation of this, Slack’s platform has grown to include more than 200,000 developers, and there’s still constant need for robust tools internally. This offers partners and developers a little more flexibility when it comes to figuring out what experience makes the most sense for people that sit in Slack all day, but have to keep porting information to and from their own tools.

“There’s such a demand for specialized software, and for great tools that are easy to use and interoperable with all applications you use,” Slack chief product officer April Underwood said. “We think this is good, and we think more tools means customers have more choice. Ultimately there’s more competition in the marketplace, that means the best tools, the ones that truly help companies do their best work, rise to the top. But your work experience becomes increasingly siloed. Slack needs to be highly configurable, but in doing so we believe Slack is the collaboration hub that brings all this together.”

Each company that wants to build in an integration — like Asana for task management or Zendesk for ticket management — works to create a new flow within the core Slack experience, which includes a new dropdown inside a message and a prompt to bake something into the chat flow. Once that happens, all that information is then ported over to the integration and created in the same way an employee would create it within that environment. If someone creates a Zendesk ticket through an action in Slack, Zendesk automatically generates the ticket on their side.

Slack has sprawled out over time, and especially as companies using it get larger and larger, the company has to figure out a way to show that it can remain a dead-simple app without turning into a bloated window filled with thousands of instant messages. Actions is one potential approach to that, where users can know from the get-go where to coordinate certain activities like equipment procurement or managing some customer information — and not have to go anywhere else.

The other advantage here is that it makes the destination for completing a task not necessarily a “what,” but also a “who.” Slack is leaning on its machine learning tool to make it easier and easier to find the right people with the right answers, whether those questions are already answered somewhere or they know who can get you the information right away. Actions is another extension here, as well, as users can get accustomed to going to certain coworkers with the intent of completing tasks — such as their IT head in their office that they walk by every morning on the way to grabbing coffee.

The company says it’s also working on what it’s calling the Block Kit, which integrates those tasks and other elements directly into the Slack chat flow in a way that looks a little more user friendly from a kind of visual sense. The idea here is, again, to create an intuitive flow for people that goes beyond just a simple chat app, but also offers some additional way of interactivity that turns Slack into a more sensible feed rather than just a window with people talking to each other. Actions are available from Jira, Bitbucket, Asana, Zendesk, HubSpot, and several others.

Actions is a tool that Slack is unveiling at its own developer conference, Spec, this morning. That in of itself is yet another example of Slack looking to graduate beyond just a simpler information feed that works well with smaller companies. Developers are often the ones that figure out the best niche use cases for any platform, as it means Slack can focus on trying to figure out how all these integrations fit into its design ethos. The company has to figure out how to convince larger companies that they need a tool like this and it won’t get out of hand, and also ensure that smaller companies don’t graduate into something a little more flexible that can serve those niche cases as they get larger.

To be sure, Slack is growing. The company said it hit 8 million daily active users with 3 million paid users earlier this month. That’s helped it quickly jump to a $5.1 billion valuation (as of its most recent funding round), and the company has been carefully rolling out tools that might make communication within larger companies a little easier — including the long-awaited launch of threads a little more than a year ago.

But Slack also faces increasing competition as time goes on, not only from the traditional companies looking to build more robust but simpler tools, but also from companies that have spent a lot of time working on collaboration tools and are now exploring communication. Atlassian’s opened up its communications platform Stride to developers in February this year. Microsoft, too continues to update its Teams product. Slack was able to expose pent-up demand for this kind of an approach, but it also has to defend that approach — and making it a little more flexible without feature-creeping is going to be its biggest challenge going forward.

Apr
22
2018
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Slite raises $4.4M to create a smarter internal notes tool

Slack exposed the demand for a dead-simple internal communications tool, which has inspired a wave of startups trying to pick apart the rest of a company’s daily activities — including Slite, which hopes to take on internal notes with a fresh round of new capital.

Slite is more or less an attempt at a replacement for a Google Doc or something in Dropbox Paper that is sprawling and getting a little out of control. An employee might create a Slite note like an onboarding manual or an internal contact list, and the hope is to replace the outdated internal wiki and offer employees a hub where they can either go and start stringing together important information, or find it right away. The company today said it has raised $4.4 million in a new seed funding round led by Index Ventures after coming out of Y Combinator’s 2018 winter class. Ari Helgason is joining Slite’s board of directors as part of the deal.

“We now have to develop this product enough to show we can actually replace large amounts of things,” co-founder Christophe Pasquier said. “Today we have more than 300 active teams, and we have to show that we can make it scale. In the short term is just we’re replacing Google Docs because these tools ahven’t evolved and we’re bringing something super fresh. The longer-term vision of really bringing all the information that has value from a team and becoming this single source of truth for teams.”

Slite tracks permissions and changes to the notes in order to allow companies to do a better job of maintaining them, rather than sharing around links and having different people jump in and make changes. The part about sharing links is one in particular that stung for Pasquier, as even larger companies can have issues with employees asking in Slack what policies are — or even for links to parts of the internal wiki where that important information is buried.

Getting there certainly won’t be easy. Companies like Dropbox continuing to invest in these kinds of collaborative note-taking tools — that could easily evolve into internal hubs of information. And as Pasquier tries to liken the development arc to Slack, which showed employees wanted some more seamless tool for communication, that company is also working on making its search tools smarter, like helping employees find the right person to ask a question. It doesn’t look like an asynchronous notes tool just yet, but if all the information is somewhere in Slack already, a smart search tool may be the only thing necessary to find all that information.

Apr
08
2018
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In a Slack world, Microsoft bets on Teams and Yammer

The growth of Windows has slowed as Microsoft’s mobile platform goals have faded and the PC market matured. As a result, Microsoft has had to seek new revenue outside of its operating system.

In 2017, as part of that effort to grow, Microsoft announced a new subscription product called Microsoft 365, bringing together Windows, the company’s cloud-centered productivity suite Office 365 and enterprise tooling into a single package.

The introduction of Microsoft 365 presaged the company’s re-organization which, to quote CNBC, “rebuilt the company around the cloud instead of Windows.” This seems reasonable; if Windows isn’t going to return to growth, other services have to keep adding top line revenue. Microsoft’s evolution to a cloud-powered, services-focused company is therefore set to continue.

In the pursuit of new, non-Windows top line, Microsoft wagered that it could expand its “commercial cloud” revenue to a $20 billion run rate by the end of its fiscal 2018. It beat the goal, reaching the $20 billion mark far ahead of the calendar-equivalent date of mid-Summer of this year.

One of those products, Teams, is a component to Office 365 and part of what Microsoft CEO Satya Nadella called a “growth opportunity” that is “a lot bigger than anything [his company has] achieved.”

Today we’re going to explore Microsoft’s current actions in one part of the cloud productivity space through the lens of Teams.

Microsoft Teams

Microsoft’s Teams product is a communications tool often compared to Slack . TechCrunch, for example, recently called the software service “Microsoft’s Slack competitor.” ComputerWorld, in a news item earlier this year, wrote that “Microsoft turn[ed] up [the] heat on Slack” when it announced new Teams features.

It goes on and on, allowing us to comfortably hold up Microsoft Teams as Redmond’s answer to Slack, a company famous for its quick growth, impressive mind share and its independent status from any major tech company. That last fact remains true despite rumored acquisition interest from Microsoft itself, along with pretty much every big company in the sector you can name.

To see Microsoft invest in its own tool that competes with Slack isn’t surprising. There is a large market for the product, and Redmond is loath to let any rival service cut in on its productivity revenue.

Therefore, if there is a hot productivity tool in the market and Microsoft isn’t going to buy it, it might as well build one of its own. Unsurprisingly, the company has been hard at work doing just that.

Joining a big company when you are a comparatively small company can be arduous.

News that Teams could release a free version made headlines. Teams also picked up guest access in February, its introduction of Cortana integration made it into mainstream tech publications and this week Microsoft announced new “retention policies” for Teams.

All that and Microsoft bought Teams a friend this year in the form of Chalkup, a collaboration company focused on the education world.

In short, Teams is adding new features while building its org chart and expanding access. All good things, certainly. However, it was not too long ago Microsoft spent quite a lot of money to buy a different, distinct collaboration tool. What happened to it?

Yammer

Microsoft bought Yammer in 2012 for $1.2 billion, building out what TechCrunch called, at the time, its “Social Enterprise Strategy.” And while the Yammer-Microsoft deal was “great news” for the company and its investors, it also marked the beginning of the “tough part” for the newly acquired startup.

Joining a big company when you are a comparatively small company can be arduous. And if you do so when the larger company is undergoing a massive change in leadership (Microsoft hired a new CEO two years after the Yammer deal) and a business model change-up (Microsoft bought Nokia in 2014, also two years after the Yammer deal, before closing that strategic idea out years later), it’s probably even harder to integrate.

Externally, that difficulty showed. Following the Microsoft deal, Yammer search volume grew before stagnating and later slipping. The product was eventually switched on for free for Office 365 customers in early 2016, four years after it was purchased. Office 365 itself launched a half-decade before, making the moment a bit long in the works.

But all that is the past, and, notably, Microsoft is putting more emphasis on Yammer today than it has in recent years. That may feel odd, given what we just went over concerning Teams.

To dig into that, Crunchbase News got Microsoft’s Seth Patton on the phone, who explained the company’s thinking. According to the 15-year company veteran who now works on Office 365, Microsoft has two separate views for Teams and Yammer. Teams is built for what Patton calls inner-loop communication: stuff for teams, smaller companies and the like; Yammer, in contrast, is better for outer-loop communication: less tactical decisions and more company-wide communications.

The split between Slack and Teams products and the Yammers and Convos of the world isn’t hokum or mere corporate-speak. I’ve worked in newsrooms that used the mix of tools to allow for simple direct messaging between individuals (Slack) and team-wide threaded communications (Yammer). It takes a little getting used to, but it can flow well if you need that level of inter-party discussion.

Even more interesting than the fact that Yammer is not dead is that Microsoft is actively investing in it. According to Patton, Microsoft’s chiefs “doubled down” on Yammer while Teams was being brought into the market in late 2016. This gave Yammer about a year of redoubled investment and attention.

Taking all that together, Microsoft is investing in two communications products at the same time, both of which are baked into its productivity suite. So why the huge push now?

Slack: Software’s favorite rocket ship

You are no doubt familiar with Slack’s growth arc. It’s been a nearly chronic narrative in tech for the past few years. And I don’t mean that in a pejorative sense. (I’m as guilty as anyone else.)

But, in case you have a life, here are some highlights: Slack reached ARR of $50 million in December of 2015. In October of 2016, Slack hit the $100 million ARR mark. Then the company bested $200 million last September. That’s darn quick, and investors took notice, showering the company with cash and ever-rising valuations.

One way to get acquired, after all, is to stick out by worrying the biggest companies in the market through growth.

Fueling Slack’s continued growth is a push into the realm of bigger companies. The firm launched Slack Enterprise Grid last January, bringing enterprise-grade management tools to Slack’s product. With Enterprise Grid, Slack can keep going after bigger accounts. (To that point, IBM has more than 200,000 active users on Slack that use Enterprise Grid.)

That quick growth has made Slack an acquisition target. One way to get acquired, after all, is to stick out by worrying the biggest companies in the market through growth. It’s just hard as heck to do, as incumbent revenue numbers are so large that, well, you have to grow fast to become interesting.

An even bigger scrap

As we know, Slack has rebuffed acquisition offers. As a result, we’re seeing Microsoft, the dominant player in the world of productivity, attempt to slow down Slack in an effort to not lose future users and future dollars. Hell, even Google is in on the race. Its Slack competitor launched for early users in February. Facebook is also tinkering around the edges. It’s fun to watch.

But productivity is Microsoft’s cash cow. For Google, it’s a big side project, but nothing compared to its advertising revenue. That puts Microsoft and Slack more up against one another in the enterprise chat fight.

(In mid-March, Microsoft announced that 200,000 organizations now use Teams, up from 125,000 in September of 2017. That’s 60 percent growth in a half-year or so — a quick growth pace, too.)

What we’ll learn over the next few years is if Microsoft’s enormous enterprise channel can be leveraged enough to slow Slack’s growth, or if Slack’s momentum can actually capture a piece of the productivity market and hold onto it.

It’s a startup against a platform company, a classic enough battle. But with big tech bigger, richer and more powerful than ever, it’s a more relevant business case than we might think at first blush. More when one draws blood or Slack goes public.

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